UK figures fall short of expectations
The UK GDP figures have now come in and have fallen a little short of market expectations. We see an increase of 0.6% for the second quarter of the year after the 0.3% rise registered in the first quarter. GDP has risen 1.4 per cent from last year which is in line with market consensus. For the first time in three years we see an expansion in industry, with both construction data and retails figures showing improvements. These are clear signs Britain’s recovery is gaining momentum.
Meanwhile, German business confidence rose for a third month, indicating that Europe’s largest economy is recovering. Unemployment unexpectedly declined in June and the nation led the first expansion in euro-area manufacturing in two years in July.
We now see GBP/USD trading pretty much mid way between the year’s highs and lows at 1.5300. GBP/EUR softening a little to 1.1600 and EUR/USD now at 1.3180.