Forex News: UK Q3 Economic Growth is Revised Lower
THE TAKEAWAY: UK GDP revised to 0.9% in final estimate -> UK budget deficit at 17.5 billion Pounds -> Sterling falls temporarily
The rise in UK Gross Domestic Product during the third quarter was revised lower to only 0.9%, from a previous estimate of 1.0%, according to a final estimate by the UK Office for national statistics. However, the change in GDP from Q3 of 2011 was revised higher to 0.0% from a previous estimate of -0.1%.
The UK budget deficit in November rose to 17.5 billion Pounds, higher than the forecasted 16 billion Pounds. Consumer spending was revised to only 0.4% higher in Q3 from a previous estimate of 0.6%. The rise in manufacturing was revised to 0.7% from 0.9%.
The rise in GDP follows three straight quarters of negative growth in the UK. However, the Bank of England said that the growth was due to one time factors like the Olympics and the previous quarter’s holiday and said that the economy might contract again in Q4.
The sterling briefly declined following the release before reversing and climbing back above 1.6250. GBPUSD fell in currency markets overnight following news that the US House of Representatives cancelled a vote on a tax bill and the US Senate called a vacation until after Christmas. A yearly high at 1.6309 could continue to provide resistance, and support could be provided by a month long rising trend line, currently at 1.6232.