The British pound is holding steady against some of its major currency rivals on Thursday after the national economy recorded slower growth in the third quarter. Investors are combing through the influx of economic data to gauge the country’s post-pandemic direction.
According to the Office of National Statistics (ONS), the UK economy advanced at an annualized rate of 6.6% in the July-to-September period, down from the 23.6% expansion in the second quarter. The market had forecast growth of 6.8%.
On a quarter-over-quarter basis, the GDP growth rate rose 1.3% in the three months ending in September, falling short of the median estimate of 1.5%. The GDP rose 0.6% on a monthly basis in September, up from 0.2% in August.
The British trade deficit widened to its largest gap since January, with imports climbing 2.9% to a nine-month high and exports rising at a tepid rate of 1.2%.
Many measurements are showing slow growth in the UK economy.
Industrial production contracted 0.4% in September, while manufacturing output tumbled 0.1%. Construction output advanced 7.2% year-over-year in September, down from the 9.3% boost in August.
Business investment eased in the third quarter, rising 0.8% from the same time a year ago and 0.4% from the same period.
The UK bond market was mixed toward the end of the trading week, with the benchmark 10-year bond down 0.003% to 0.919%. The two-year bill was unchanged at 0.566%, while the 30-year bond was up 0.001% to 1.059%.
Many officials in England have soured on the economy, warning that many of the country’s sectors would not return to pre-pandemic output. The nation has been impacted by the global supply chain crisis, like a lot of other countries.
The Bank of England (BoE), meanwhile, wants to raise interest rates sooner to prevent inflation becoming too hot to handle. Today, the annual inflation rate stands at more than 3% and it is projected to top 5% in the coming months. The BoE’s target is 2%.
The GBP/USD currency pair fell 0.23% to 1.3377, from an opening of 1.3405, at 16:32 GMT on Thursday. The EUR/GBP pair edged up 0.05% to 0.8568, from an opening of 0.8564.