UK 3Q GDP Rises Above Expectations
THE TAKEAWAY: UK GDP better than expected -> BoE warns of future growth slowdown -> Cable stays strong on the day
Data released from the UK today showed a larger-than-expected rise in gross domestic product during 2011’s third quarter. GDP grew by 0.6% on the quarter, versus the 0.5% rise predicted by economists. On the year, GDP growth was in line with predictions at 0.5%. A separate report showed the current account deficit widening to record levels in Q3 2011.
The Bank of England has over the past months engaged in a large stimulus package. . In September, the BoE expanded its asset purchase program by 75 billion pounds. BoE Minutes released yesterday revealed that some members referenced the possibility of further quantitative easing measures in the future. The Bank has further warned that growth is likely to soften in Q4 2011 and Q1 2012.
Cable was strong on the day as of this report, in large part due to a renewed bout of risk appetite and pre-year end profit taking.
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