Talking Points
- UK growth of 0.7% in 4Q 2016 shows the economy ending the year in a strong place, but 2017 may see slippage.
- EU President Donald Tusk releases draft Brexit statement.
- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for next week on the DailyFX Webinar Calendar.
The UK economy ended 2016 in good shape with 4Q growth of 0.7%, in line with expectations. Year-on-year 2016 growth slipped to 1.9% from a prior 2.0% after 3Q growth was downgraded to 0.5% from 0.6%.
Commenting on today’s GDP figures, Head of GDP Darren Morgan wrote:“Growth in the final quarter remained unrevised at 0.7%, with buoyant contributions from the retail and wholesale sectors in the run-up to Christmas. Services dropped slightly in January, with weak performances from hotels and the motor trade. However, the long-term picture is still one of robust growth.”
Sterling was little changed on the release as traders parsed EU President Donald Tusk’s Brexit negotiating draft. Tusk remained firm in his view that the EU should not suffer but his tone was slightly more conciliatory than many had feared. The President said that while it is his duty to minimize the uncertainty and disruption caused by the UK decision to withdraw from the EU for our citizens, businesses and Member States,“we owe it to each other to do everything we can to make this divorce as smooth as possible.”
Chart:EURBP 10-Minute Timeframe (March 30 – 31, 2017)
--- Written by Nick Cawley, Analyst
To contact Nick, email him at nicholas.cawley@ig.com
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