UK Economy Contraction Reduced

GDP numbers for this quarter contracted by 0.6%, less than the anticipated 0.7%. Analysts and some government officials are taken this a sign of recovery, a weak sign, but a sign nevertheless. Taken into account with the rise in the savings rate (5.6% vs 3.9%) it could reduce the pace of the recovery as Stephanie Flanders from the BBC points out:

Although this was a necessary and welcome adjustment, given the levels of personal debt seen in recent years, it could affect the strength of any recovery.

“Obviously, that extra saving is money that isn’t being spent in the shops,”

BBC NEWS

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza