Pound slips on slower growth figures

26 May, 2017

Rob Bastin

Thursday’s trading was another quiet day on the markets compared to the volatility seen in recent weeks. With a lack of key data this week the pound has been relatively stable but stuck at 2 months lows against the Euro with little expectation of any recovery prior to the Uk elections in 2 weeks’ time.

There was one UK announcement for the markets to digest in the form of GDP growth figures for Q1 of 2017. Figures had previously pointed to a 2.1% growth on the year and 0.3% in the quarter, however latest data has now seen both of these figures downgraded by 0.1% according to the Office for National Statistics. In the final quarter of 2016 the UK grew by 0.7%, so we are now seeing a 0.5% slowdown in the first 3 months of 2017. The ONS stated that this is partly due to a decrease in retail sales, with consumers cutting back on spending due to acceleration inflation and increasing prices. Inflation currently sits at 2.7%, the highest levels seen since September 2013 and is eareected to continue to rise this year.

The day ahead is another quite one for data announcements with revised GDP figures for the US this afternoon at 1:30 pm along with Durable Goods orders. Elsewhere there is a G7 meeting today ahead of the UK bank holiday weekend, where latest polls for the elections will likely be released. If you have an up and coming currency need, contact your broker today to discuss how you can either remove or manage the risk of your purchase during these uncertain times.