Pound Unchanged GBP/USD is almost unchanged in the Friday session. The pair, which has been quiet since mid-week, is currently trading at 1.2450. In the UK, British Second Estimate GDP for the third quarter posted a gain of 0.5%, matching the forecast. This reading was unchanged from the Preliminary GDP reading of 0.5%. Preliminary Business Investment posted a sharp gain of 0.9%, crushing the estimate of -0.2%. There are no major events in the US.
On Wednesday, the spotlight was on the UK Autumn Forecast Statement, which essentially is a mini-budget. This marked the first budget since the Brexit vote back in June. The pound has plunged 16 percent in that period, but the economy has weathered the post-Brexit period fairly well, consistently putting up numbers which have beaten expectations. However, there are serious concerns that the actual exit from European Union will take a heavy toll on the British economy. The Autumn Statement appears to reflect these worries, as the Office for Budget Responsibility (OBR) revised downwards its growth forecasts for 2016 and 2017. The 2017 forecast was revised from 2.2% to 1.4% and the 2018 forecast from 2.1% to 1.7%. However, GDP in 2016 is expected to edge up to 2.1%, compared to the previous forecast of 2.0%. As well, the government has shelved its plan for a budget surplus in 2019-2020, saying it is aiming for a balance budget “as early as possible”.
Click here for reuse options!