June 28, 2018

AvaTrade, What to expect from UK GDP Q1 2018 release on Friday?

Is the UK economy strong enough for Brexit?

AvaTrade - What's now?

Please note AvaTrade does not provide services to residents of USA and Belgium.

This article is originally referred from AvaTrade.

The BoE is impatiently waiting for this release UK Gross Domestic Product (GDP) – Q1 2018 on Friday, June 29th, 2018 at 8:30 GMT.

Last month, the weakest household spending for three years and falling levels of business investments dragged the UK economy to the worst quarter for five years, according to the Office for National Statistics.

Official data indicate that the UK GDP dropped to 0.1% in the first quarter, from 0.4% the previous quarter.

This situation fuels increasing concerns for a deteriorating growth as Britain prepares to leave the EU next year

. Some economists, including officials at the Bank of England, expected a higher growth.

Currently, the consensus expects a GDP growth of around 1.2% for 2018 as a whole, with a potential recovery in the second quarter.

Will this month’s data confirm this outlook for the UK economy?

Market experts are divided into 2 groups:

  1. Bullish factors for the GBP
    • The service industry is strong and contributed the most to the GDP.
    • Theresa May has now greater control of Brexit negotiations.
  2. Bearish factors for the GBP
    • The UK GDP slowed more than expected.
    • Brexit negotiations are behind schedule.

What do you think? Will the EURGBP rise or fall?

What is the GDP and Why is it so Important?

The Gross Domestic Product (GDP) is released by the Office for National Statistics and measures the annualized change in the inflation-adjusted value of all goods and services produced by the UK economy.

The GDP is considered the broadest measure of the UK’s economic activity and the primary indicator of the economy’s health.

Generally speaking, a higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the pound.

Original Source: AvaTrade

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