A big disappointment in the UK economy: the economy grew by only 0.3% q/q and only 2.4% y/y. The numbers take part of David Cameron’s wind out of his sails. His main point was the UK economic recovery. This doesn’t look so strong now. Miliband could say again that most people are not feeling it.
GBP/USD is falling over 50 pips to 1.5175. The recovery from the lows is very marginal, and another slide cannot be ruled out.
Industrial output contracted by 0.1% and services rose by 0.5%. Construction looks weak but better than in Q4. All in all, we can see a slowdown in Q1, but the general picture is of continued growth.
The UK was expected to report a growth rate of 0.5% q/q for Q1 2015 following 0.6% in Q4 2014. Year over year, a slide 2.6% from 3% was expected. The publication comes 9 days before the general elections and is politically charged.
GBP/USD was sliding from the highs just before the release. It had already touched 1.5260 but slid to 1.5225.
Here is the preview: trading the UK GDP with Pound/dollar
At the same time, the BBA released its mortgage approvals.
The recent polls towards the May 7th elections continue showing a tie between the incumbent Conservative government and opposition Labour, with both parties losing ground to smaller ones, most notably the SNP in Scotland.
The US dollar has been on the back foot once again as it awaits its own GDP report and the all important Fed decision tomorrow.
More: FOMC Preview 5 keys
Here is the fall of GBP/USD on the chart:
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