Pound falls as UK growth lower than expected

The Pound has fallen away in the last few days, dropping back to around the €1.13 level against the Euro, and to $1.39 against the US Dollar. The drop came after the latest round of UK employment numbers and growth data.

Figures showed an unexpected rise in unemployment. Average earnings was up 2.5% as expected. UK GDP fell to 0.4% and was expected at 0.5%, so as the number was below, the Pound fell. Several Bank of England members gave speeches yesterday again saying that due to high inflation, interest rates would need to rise, however this news is nothing new so didn’t help Sterling.

Over in the USA the FED again signalled that interest rates would be going up 3 times this year, and this helped to strengthen the USD, pulling GBP/USD rates back below the $1.40 mark.

Tomorrow we have EU inflation numbers, German GDP, and speeches by the ECB, all of which could affect GBP/EUR rates. Positive numbers from the EU would strengthen the Euro and pull rates lower.

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