Manufacturing production in the UK dropped by 1.3% in October. A drop of 0.2% was expected. The wider industrial production figure dropped by 0.8%, while a rise of 0.9% was expected.
GBP/USD was sliding under 1.6040 just before the release. It is now extending its falls. A small gap can be seen in the 30 minute chart.
Update: after the pair fell to 1.022, it pulled back and closed the small gap. There still is more downside potential, although the round 1.60 figure provides support.
In addition to the disappointment in figures released for October, September’s figures were revised to the downside: manufacturing production was flat instead of +0.1% originally reported. Industrial output was revised to a drop of 2.1% instead of 1.7%.
Consumer Inflation Expectations rose by a rate of 3.2% in the previous report. This figure now stands on 3.5%.
Earlier in the week, the UK reported a series of unconvincing PMIs, increasing the fear for a triple-dip recession. The Bank of England left policy unchanged, but could still expand the QE program in early 2013.
For more on the pound, see the GBPUSD forecast.
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