ExchangeRates.org.uk - The British Pound Sterling overall has continued to struggle in global markets amid a series of downbeat economic surveys.A dollar retreat on benign inflation data has, however, allowed the Pound to Dollar (GBP/USD) exchange rate to make gains.
From 6-month lows of 1.2475 late last week, GBP/USD has recovered to 1.2570.
Scotiabank (TSX:BNS) commented; “regaining 1.2520+ might mitigate developing bearish pressure for a drop back to the 1.23 area.”
Seasonal factors may also help underpin the Pound in thin markets over the next two days.
According to the latest ONS update, GDP was unchanged for the third quarter of 2024 compared with the previous estimate of 0.1% growth.
There was also a small downgrade to the second quarter to 0.4% from 0.5% with annual GDP growth at 0.9%.
There was no growth in the services sector during the quarter, while a 0.7% increase in construction was offset by a 0.4% fall in production.
Real GDP growth per capita declined 0.2% both for the quarter and compared with the previous year.
The December British Retail Consortium (BRC) survey on consumer expectations dipped to -27% from -19% previously.
BRC chief executive Helen Dickinson, commented: “Public confidence in the state of the economy took a nosedive.
If these expectations are realised, retailers could find themselves facing a New Year spending squeeze just as they unveil their January sales.”
Scotiabank commented; “the run of soft consumption reports does suggest weaker growth momentum into the end of the year.”
The latest CBI industrial and retail surveys for December were notably weak, reinforcing near-term reservations over the outlook.
According to the latest CBI Growth Indicator, companies expect activity to dip in the first quarter with confidence at a 2-year low.
CBI interim deputy chief economist Alpesh Paleja, commented; “There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.”
He added; “Businesses continue to cite the impact of measures announced in the Budget – particularly the rise in employer NICs – exacerbating an already tepid demand environment.”
Paul Dales of Capital Economics commented; “Our hunch is that 2025 will be a better year for the economy than 2024.
But more recent data suggest the economy doesn’t have much momentum as the year comes to a close.”
On Friday, the latest US inflation data provided an element of relief with the PCE prices index increasing 0.1% for November with an annual increase of 2.4% compared with consensus forecasts of 2.5%.
Core prices also increased 0.1% with the annual rate unchanged at 2.9% and compared with expectations of 2.9%.
Markets still see less than a 10% chance of a further Fed rate cut January with the chances of a March move just below 50%.
This content was originally published on ExchangeRates.org.uk