The final GDP reading for the U.K. was revised higher to 1.5% from a preliminary reading of 1.4%, which suggests that the economy may avoid a recession in the third quarter. However, falling home prices paired with tightening credit conditions have clearly taken a toll on Europe’s second largest economy, and conditions have gotten worse as Brandford & Bingley were nationalized by the U.K. government over the weekend. Meanwhile, the current account deficit widened to -11.0B from a revised reading of -5.5B in the first quarter, signaling that capital outflows have increased as growth prospects weaken. Despite ongoing growth concerns for the economy, the improved growth figures helped the pound-dollar to break above 1.8050, and is currently holding around 1.8080.
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