Yesterday saw the release of the first set of UK GDP figures for the third quarter of this year since the vote to leave the EU, providing a true reflection of the current outlook of the UK economy. Although Q3 was slightly lower than Q2, the figure came out much better than expected and the Pound received a welcomed, albeit short lived, boost. The UK’s services industry played a key part in the growth seen, as it makes up over ¾ of the UK economy.
This positive data has put doubts in Economists minds as to whether the Bank of England will act and cut interest rates further at their next meeting on Thursday.
Japanese car manufacturer Nissan have announced the building of two new car models in Sunderland, upgrading the factory to a “super-plant”, securing 7,000 jobs and manufacturing 600,000 new vehicles each year. This is a huge boost to confidence in the UK manufacturing sector, and could lead to other car manufacturers taking the plunge in the UK too.
Although yesterday’s news was all very positive for the UK, the Pound fell against the Euro by almost a cent throughout the course of the day, most likely due to recurring concerns over the expected triggering of Article 50 by the end of March 2017. This just goes to show how volatile the current market is. Being in close contact with your Account Manager here is more important now than ever, as they will help you to act quickly on any spikes as they occur.
There is little economic data released in the UK today, with the next release of note being during the early hours of Monday morning when Consumer Confidence figures will be published. These are expected to show a decline, which is unsurprising given the current unsettled climate. On Tuesday morning, Manufacturing PMI data will be released followed by Construction data on Wednesday.
The next UK Interest Rate Decision will be announced on Thursday at 1pm followed by a speech by BoE Governor Mark Carney. Although yesterday’s GDP data has reduced the likelihood of a cut, Mr Carney will likely cause waves during his speech and any clients with a GBP requirement would be wise to outline and pending transfers to their Account Manager here ahead of this key announcement.
Whilst it is not expected that the BoE will cut interest rates again, volatility is expected and clients looking to buy foreign currency should put in steps to mitigate risks. Call our trading floor today on 01494 725 353 to discuss your requirements further.
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