British GDP Revised to the Upside, But Current Account

The economy in the UK grew by 0.6% in Q3 according to the final publications. This is a surprise and an upwards revision from 0.5%. This upwards revision came on top of a downwards revision for Q2: the economy didn’t grow at all, contrary to a rise of 0.1% reported in the “final” release. Nothing is final.

Britain’s current account deficit leaped to 15.2 billion pounds. Early expectations were much lower, a deficit of only 5.6 billion in Q3. In Q2, the deficit stood on only 2 billion pounds.

Business investment was revised to the upside, from a drop of 1.3% to a rise of 0.3% in Q3 2011

GBP/USD was trading around 1.57 before the publications and is now sliding to lower ground. The pair found support at 1.5660 before the recent rise, and could stop its fall in this area once again.

For more on the pound, see the GBP/USD forecast.

The British pound has managed to distance itself from the European troubles recently. The movements in GBP/USD were still correlated with the moves in EUR/USD, but the euro lost much more ground.

The result is big drop of EUR/GBP that reached levels seen only at the beginning of the year.

Yet as we see in these figures, the situation in Britain is far from optimal.