UK GDP revision pushes Pound higher

1 October, 2014

Robin Haynes

Yesterday’s revision to UK GDP showed an increase to 0.9% for the British economy for the second quarter, up slightly on the previous estimate of 0.8%.

This, along with an increase in German unemployment, helped sterling move higher against the Euro in particular, with sending payments in Euros hitting its cheapest level again since April 2008.

At the same time as the Pound reaching pre-financial crisis levels against the Euro, the revised UK figures also showed the economy grew surpassing its pre-recession peak earlier than previously thought, in the second quarter of this year. The Office for National Statistics did, however, say that the current account deficit (the difference between exports and imports) was bigger than expected.

Today we have a quieter day in terms of data releases, with only US manufacturing due this afternoon. Tomorrow however there is a crucial European Central Bank press conference, which could go a long way to define the next direction for the single currency – will President Mario Draghi talk the value of the Euro back up? Nobody knows of course, but we certainly have some very attractive exchange rates available at the moment.

The US Dollar rate continues to resist any weakness, but sterling looks strong across the board against most other major currencies.