Pound Strengthens After UK Ecostat Release
The pound rose against both the US dollar and the euro on Tuesday after slightly better than expected GDP data from the UK was published on Tuesday morning. Although quarterly GDP numbers showed the UK economy stagnated in the last quarter of 2019, December’s month-on-month GDP numbers were slightly more promising, suggesting a restoration of business confidence following the Tory party’s election win in mid-December. The numbers also revealed a surprise jump in exports, month-on-month rise of 17.4%.
However, the pound’s gains were muted as the numbers also painted a fairly concerning picture of the health of the UK economy. The data showed that industrial production rose by just 0.1% month-on-month, with industrial output falling by 1.8% over the last year. As a result, the pound lost some ground late-morning before levelling off in the mid-1.18’s against the euro and the low-1.29’s against the US dollar.
There are no significant data releases scheduled for the rest of this week so any movement in sterling is likely to be the result of Brexit-related, EU-UK trade deal headlines.