UK GDP for the month of July was forecasted at 6.7%, compared to 8.7% in June. The result was pretty much bang on the money at 6.6%.
Both industrial and manufacturing production for July also beat expectations but were considerably lower than June’s print.
Economic data, for all it’s worth, is still taking a back seat – everything is still recovering in some shape or another and adapting to changes on a weekly basis.
Looking at the bigger picture, Brexit is in charge of GBP volatility, the ECB are dictating EUR direction based purely on monetary policy and QE, and the USD is being driven by risk sentiment and negative yields. As a result, GBPEUR has now dropped 4.42% since September 1st and GBPUSD has fallen 5.29%
There are several speakers from the European Central Bank talking through-out this morning, so there will be increased pressure on the Euro rally from yesterday to maintain a positive direction.
The UK are expected to reach a broad agreement with Japan over future trade today, which may be one of the only positive stories to land. Brexit talks will continue despite the clashes, and therefore remain a potent risk to GBP.
Have a great weekend.
Author: Alistair Hutson, Senior Relationship Manager
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