All doom and gloom for Sterling
- Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Sterling, UK, Uncategorised
- May 10, 2018
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British Industrial growth slightly rose in March, therefore confirming a gloomy first quarter for the economy that pretty much confirms no Bank of England interest rate hike later today.
The data, released along with figures for the construction industry and overseas trade, did nothing to alter the picture of an economy that has struggled for momentum in recent months.
The ONS said industrial output inched up by 0.1 percent month-on-month in March, the same pace as in February and slightly below the consensus for growth of 0.2 percent in a poll of economists.
Manufacturing output, which was a bright spot last year thanks to the strong global economy, edged lower for a second month running, dropping by a monthly 0.1 percent after a 0.2 percent fall in February. Economists had expected a fall of 0.2 percent.
Separate ONS data showed Britain’s goods trade deficit with the rest of the world increased to 12.287 billion pounds in March from 10.414 billion pounds in February — at the top end of forecasts that had pointed to a gap of 11.25 billion pounds.
The ONS also released figures for construction output, which fell 2.3 percent on the month in March, after a fall of 1.0 percent in February — as expected.
On the year, construction output was down 4.9 percent in March, the biggest annual drop since January 2013.
We have the inflation report and GDP estimate data to be released later this afternoon, looking at how things are going for the UK now, I do not expect anything positive from the data.
All the negative data points towards a gloomy outlook for the UK economy going forward, when Carney speaks later I would not be surprised to hear a rate rise has been pushed back to as far as next year. If that’s the case, especially with Brexit getting closer I expect the value of Sterling could fall further at a faster pace.
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