UK GDP Down 0.4% in Q3, Stunts Recent Sterling Gains

Well, that is a blow. UK GDP decline 0.4% in the third quarter according to data just released from the Office of National Statistics.

This comes as a surprise but not a shock to me. I was hopeful that we would have seen some GDP growth in the third quarter, and come out of recession just 1 quarter behind Germany and France.

Output declined across all major sectors according to the ONS. This comes a day after the body revealed an increase in retail sales in September for the second month running. It seems that the manufacturing and wholesale sectors are taking some time to catch up with the increasing demand, and/or that this is a supply overhang.

This will be damaging for Sterling, which has been climbing recently because of increased faith in the economy from the Bank of England.

In fact it has had an immediate effect. Now, just minutes after the data has been released Sterling has dropped 0.001c against the Euro and over 1c against the US Dollar. If that is anything to go by we are in for a day of falls in the value of Sterling. Watch this space for further updates.

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