Silver Linings - UK Data Slightly Better Than Expected And Pound Surges

11th November 2022

Pound Sterling Holds Large Gains against Euro and Dollar Despite News UK Economy Shrunk in September.

Pound Sterling Live web site report today shows the pound has rallied to higher level.

The British Pound held its Thursday gains against the Dollar, Euro and other major currencies following the release of UK GDP data on Friday that showed the UK economy shrunk 0.6% in September.

News Flash at 11.30am Friday 11 November
Pound / U.S. Dollar Exchange Rate Today: 1.1736
8.30pm 1.1839

The market was looking for a decline of 0.4%, which would typically prove a disappointment for Sterling.

However, the ONS released a sizeable tranche of data that included the manufacturing and construction sectors as well as trade, the majority of which beat expectations.

"A UK winter recession may yet be avoided, but the weak trend is clear," says economist Sandra Horsfield at Investec. "Our view remains that the economy may yet avoid slipping into recession this winter, provided there was a sizeable rebound in output post-bank holiday in October."

The Pound rallied 3.0% against the Dollar on Thursday - we can't find a larger one-day advance - following the release of softer-than-expected U.S. inflation data. In fact, this was the worst day for the Dollar in over a decade.

It will therefore take more than a 0.2% deviation in the monthly UK GDP reading to undo such a move.

Read more at Pound Sterling Live