This afternoon there will be the first full three months of Gross Domestic Product data released since the UK’s decision to leave the EU. GDP is a measure of the total value of goods and services produced by the UK. The figure compared to last quarter is expected to be 0.4% lower, however the figure is expected to be the same as this time last year. The UK has seen an increase in manufacturing orders and production as Sterling has reduced the costs of goods in the UK for importers around the world.
In my opinion the long-term effect of the weak currency could be detrimental to the economy but in the last few months there could have been an unexpected boost as exports are high.
During yesterday’s Prime Ministers Questions Jeremy Corbyn compared the PM Theresa May to Baldrick by suggesting her “cunning plan was having no plan at all”. Corbyn was pressing Mrs May on the fact that even though we know she intends to trigger Article 50 in March, we don’t know what stance the government will take. The Prime Minister has been keen for the government to not offer a running commentary, which no doubt adds to the current uncertainty faced by Sterling.
UK Investment houses have suggested that the rapid growth for UK shares could be coming to an end and that the reason for the increase may become the weakness. Since the Brexit vote the fall in Sterling made UK shares very attractive for international buyers, increasing the FTSE by 15% at the high.
There is however now a concern that the companies could start to suffer from a weak pound and this could make the businesses less attractive than their European counterparts.
The Q3 GDP figures have been an eagerly anticipated release and being in contact with your broker is vital to make sure you’re not stunned by any major market movements.
Todays GDP figures have the potential to sway GBP/EUR exchange rates in either direction. Get in touch with our brokers as soon as possible if you have an upcoming transfer on 01494 725 353.
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