Currency Note

ONS reveals Britain’s GDP stalled in February 

By Sharyh Murray-Francis April 13th, 2023

UK economy stalls in February amid industrial strikes.

Sterling has barely moved against the euro  following the release of Britain’s monthly GDP figures this morning. Against the dollar, sterling has strengthened by just over half a per cent. The data revealed the UK economy stalled in February amid industrial strikes.

This was below forecasts of a 0.1% increase and comes after an upwardly revised 0.4% growth in January. Yearly figures however are more positive – continue reading for those.

Yesterday was a quiet day on the data front. However, Bank of England governor, Andrew Bailey, delivered a speech on financial and price stability at the International Monetary Fund(IMF) Spring Meetings, held this week in Washington DC.

Today markets have just seen a flurry of economic releases from the UK, including yearly GDP, industrial production and balance of trade.

Next week economists will get an insight into UK unemployment with the latest claimant count change and unemployment data scheduled to be released at 7am on Tuesday.

In the stock markets, equities in London, including the blue-chip FTSE 100, made gains for the fourth consecutive session yesterday.  The FTSE 100 finished above the 7,800 mark which was largely driven by gains in the healthcare, industrials, and utilities sectors.

Across the pond, the picture was less optimistic after US stocks relinquished  gains made over the course of the day by the end of Wednesday.

The Dow lost almost 200-points, bringing it into negative territory. This came after the initial enthusiasm over lower than-expected inflation subsided, and as investors reassessed the outlook for tightening monetary policy.

In its April meeting yesterday, the Bank of Canada decided to keep its interest rate unchanged, at 4.5%. This comes after a pause on tightening in last month’s meeting.

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GBP: Yearly GDP reveals expansion

As well as month-over-month GDP, the Office for National Statistics (ONS) also released the UK’s annual gross domestic product (GDP) figures this morning.

The yearly numbers showed Britain’s economy expanded 0.5% compared to this time last year, beating forecasts of 0.3%.

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EUR: Germany’s inflation cools

The Federal Statistical Office reported that Germany’s annual consumer price inflation hit a seven-month low of 7.4% in March. This was down from 8.7% in the previous two months. Although inflation seems to be cooling, it still remains well above the European Central Bank’s target of 2%.

Euro-watchers will be watching closely to see how this data impacts the single currency.

USD: Softer than expected inflation

The monthly consumer price inflation in the US rose by only 0.1% in March. This was below market expectations of a 0.2% increase and much lower than February’s 0.4% rise.

It was a similar story for the yearly figures which slowed for the ninth consecutive month in March to 5%. Annual inflation in the US is currently at its lowest in nearly two years, since May 2021.

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