Insider Economy Sterling drops after GDP data confirms economic slowdown

Sterling drops after GDP data confirms economic slowdown

Sterling extended its fall on Monday after data showed that Britain’s economy last year grew at its slowest since 2012, with Brexit uncertainty hitting investment.

The quarterly GDP numbers followed other data in recent weeks that paint a picture of a UK economy slowing into 2019 as businesses and consumers grow increasingly nervous about Britain’s departure from the European Union.

Gross domestic product growth in the final quarter of 2018 fell to a quarterly rate of 0.2 percent from 0.6 percent in the previous quarter – in line with the average forecast in a Reuters poll but slightly weaker than the Bank of England estimated last week.

For 2018 as a whole, growth dropped to its lowest since 2012 at 1.4 percent, down from 1.8 percent in 2017.

The pound fell 0.3 percent to as low as $1.2895 after trading at $1.2923 before the data was released.

Against the euro, sterling dropped 0.3 percent to 87.72 pence per euro from 84.55 pence earlier.

“The thing that worries me most is that the monthly numbers for GDP were dreadful,” said Kallum Pickering, UK economist at Berenberg.

“The monthly data can be volatile but that does not bode well heading into 2019 with peak Brexit uncertainty” and signs of slowing economies in the euro zone and the United States, he said.

Britain’s economy contracted 0.4 percent in December, against the zero growth forecast by economists polled by Reuters.

Sterling last week suffered its worst weekly decline in a month, with a stalemate over Brexit weighing on the currency and leading the Bank of England to cut its UK growth forecast.

Brexit negotiations continue to hang over sterling and will likely dominate trading in the coming sessions.

Prime Minister Theresa May has rejected the idea of targeting a customs union with the EU and fears are growing that the British leader is playing a game of brinkmanship as she tries to secure backing for her withdrawal agreement ahead of the scheduled Brexit departure date of March 29.

Commerzbank analysts said that without an end to the uncertainty the pound would likely trade lower.

(Reuters)

Top Stories

Cyprus’ Foreign Ministry announces chartered flight to bring Cypriots back from Lebanon

Cyprus' Ministry of Foreign Affairs announced that it is planning to charter a flight on Thursday for the immediate return of Cypriot citizens and...

Cyprus’ President expresses condolences to Lebanon and readiness to provide assistance

President of Cyprus Nicos Anastasiades has expressed his deep condolences to the government and people of Lebanon and the islands readiness to provide any...

Police carry out 1,162 coronavirus restrictions checks

Police have carried out a total of 1,162 checks over the past 24 hours on premises throughout Cyprus to ensure compliance with government decrees...

Heavy fines, hunting bans for bird trappers in British bases

More than €10,000 in court fines have been issued to illegal bird trappers in sovereign bases’ area in the past few weeks. Alongside a...

Conflicting scientific views on extend of covid-19 spread in Cyprus

There are conflicting views by members of the scientific team advising the Cyprus government on the novel covid-19 virus and the extend of its...

Taste

Octopus ‘Kathisto’ (or Octopus braised in Wine)

Ingredients: 1/2 cup Greek extra virgin olive oil 2 medium onions, chopped fine 1 large octopus, about 2kg (cleaned and kept whole) 3/4 cup dry red wine 1/3 cup...

Homemade lemonade

Ingredients: 1 cup lemon juice 1 cup sugar Method: Thoroughly wash the lemons with soap and warm water. Roll each lemon with the palm of your hand, pressing...

‘Striftaria’ mini cheese pies

Ingredients 1 ½ cup milk 2 tbsps. flour 4 tsps. of butter 3 eggs, slightly beaten + 1 extra with 1 tbs. of milk for spreading 1 pack of...

Mini potato canapes baked on salt

Ingredients Serves: 12 1kg small Cypriot potatoes rock salt, as needed 250g salted butter 300ml full fat cremé frâiche 1 pot cod or salmon roe Method Prep:20min › Cook:35min › Ready in:55min Take...