Poor economic performance in The UK continues to gather momentum over the past three months as the economy grew by a meagre 0.1%. More importantly, the three months from July – September saw 0.3%, which had also followed 0.7% growth between January and March of this year. Contributing factors pretty much involve the increase in employers National Insurance contributions and an increase in Minimum Wage.
After a positive 2nd quarter of growth, the budget from earlier this year is now reflected in poor growth performances across construction and manufacturing in particular. This is now ramping up bets that The Bank of England will now move forward with a 25 basis-point cut in their December meeting.
The U.S Dollar has weakened this morning off the back of Donald Trump signing a bill to release funding and therefore bring an end to the longest ever government shutdown. The bill is set to keep the government funded until at least January 30th. The U.S shutdown of 43 days is by far the longest ever shutdown in The U.S, having overtaken a 35-day shutdown seen in 2019 with Trump’s first term. Whilst in shutdown, The U.S Dollar had experienced notable strength, owing to it’s safe-haven asset status, with investors and traders flocking to The Dollar in what was seen as a volatile period.
We turn our attention this afternoon to U.S Inflation data for October. Previous figures showed inflation sitting at 3%, with expectations suggesting a slight drop in prices. However, with no economic data having been released over the past month, we could see more of a reaction than normal. The Federal Reserve will also now be keeping a keen eye on this release, as any rise in prices would put the central bank in a difficult position, especially considering their job’s market isn’t overly strong right now.
GBP/EUR 1.1300 GBP/USD 1.3147 GBP/AED 4.8297
GBP/AUD 1.9996 GBP/CHF 1.0446 GBP/CAD 1.8392
GBP/NZD 2.3167 EUR/USD 1.1622 GBP/ZAR 22.3719