GBP: can the UK continue where it left off last week with some positive data?

The UK ended the week on a high following what had a been a pretty dismal showing up to that point. Although news that Britain’s construction output fell by 1.6% in September was not an ideal start, it soon picked up when UK manufacturing was shown to have grown much better than expected. It was forecast to have grown by 0.3% in September, but it actually grew by 0.7%.

In addition, the UK’s trade deficit narrowed by £700 million to £2.75 billion against the £4.8 billion gap expected. Exports of goods and services hit an all-time high and the UK was shown to have exported £900 million more goods to European countries in the three months to September. However, it is worth bearing in mind that the UK also exported £1.7 billion less to non-EU countries. Still, overall, the picture was rosier than many had predicted and sterling strengthened against the euro and US dollar as a result.

Today is quiet, but tomorrow sees the release of UK inflation, followed by the unemployment numbers on Wednesday. Finally, on Thursday we will see October’s retail sales.