No Recession in UK but no Economic Growth Either
The GDP report from the UK for Q3 was released a while ago. The global economy has been weakening for a long time and the UK economy has been weakening as well, due to the slowing global economy and due to Brexit fears. In Q2, we saw a 0.2% contraction in the British economy.
We covered the GDP report on our economic calendar section and the Q3 wasn’t looking too good either, so economists were fearing a technical recession, which would mean two consecutive quarters with a shrinking GDP. But, the UK economy avoided recession very narrowly. In Q3, we saw a 0.3% expansion in the economy.
That still missed expectations of 0.4% and in the last two months the GDP contracted. In August the GDP was revised lower from the first reading, to -0.2% while September came at -0.1%. So, no recession, but no economic growth either. The industrial production, manufacturing production and the construction output declined as well once again, so this GDP report was anything but positive.
Although, Brexit is running the game for the GBP/USD, so this currency didn’t really mind the GDP report. The Bank of England is surely watching and this is yet another nail in the coffin for rate cuts once UK elections are held and Brexit has taken a direction.
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