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The British economy grew by 0.5% according to the first revision of GDP, confirming the first release. Other British figures were disappointing. GBP/USD finds it hard to enjoy this growth.

The British economy contracted in the fourth quarter of 2010 by 0.5%. This was blamed on bad weather, but it wouldn’t have been much better without it. Q1 saw a rebound, but the broad picture is still of stagnation in the span of 6 months.

The initial reaction was a drop, but cable is strengthening at the moment and climbing towards 1.6160. The moves are very limited.

The British Bankers’ Association published its mortgage approvals number, that disappointed by falling under 30K once again: 29.4 instead of 32.2K that was expected. Last month’s number was revised to the downside: from 31.7K to 31.2K.

A bigger disappointment came from the preliminary release of business investment for Q1: a huge drop of 7.1%, compared with expectations for a rise of 2.5%. It is important to note that the previous quarter was better than earlier reported: no change instead of a drop of 2.4% initially published.

Yesterday’s figures were mixed: on one hand, the government’s deficit came out higher than expected. Debt reduction tops the agenda of the current British government, but the results aren’t exciting so far. On the other hand, CBI Realized Sales remained solid, and didn’t fall as much as expected.

Prior to this publication, GBP/USD was trading at around 1.6150. Earlier in the week, it dipped below support at 1.6110, but managed to recover. Resistance appears at 1.6280 – 1.63. For more levels and analysis, see the GBP/USD forecast.