UK – GDP Subdued as Exports Leap


UK preliminary Q4 GDP came in at a miserable 0.0% q/q, as had been widely anticipated, while growth rose 1.1% y/y. The quarterly stagnation was a product of activity-subduing Brexit and political uncertainty that was seen for much of the quarter, into the general election in mid December. Data today also showed December industrial production rising by just 0.1% m/m, below the median forecast for 0.3% growth. Industrial output contracted by 1.8% in the y/y measure, versus the median forecast for -0.9%. A BIG surprise was seen in trade data, with the goods balance showing an unexpected surplus of GBP 0.9 bln. The median forecast had been for a deficit of GBP 9.0 bln. A 17.4% m/m surge in exports juxtaposed to the 0.1% m/m decline in imports behind the headline. An unusually large export of precious metals flattened the overall trade data headline.

Cable rallied to yesterday’s 1.2940 resistance before turning lower once more, GBPJPY broke over 142.00 with a big resistance (200 hour moving average and R1 at 142.15/20) and EURGBP slipped to 0.8431 lows.

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Stuart Cowell

Head Market Analyst

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