UK GDP to Escape Brexit Effect for Now

The first indications of how the U.K. economy is performing in the aftermath of the Brexit vote will be known this Thursday, with the release of quarterly gross domestic product (GDP) figures.

Analysts told CNBC they forecast a 0.4 percent growth in the third quarter of this year – an “upside surprise” following the decision last June to leave the European Union. Prior to the vote, many market observers were pointing to economic contractions if voters opted to leave the EU.

However, the medium- and long-term outlook for the U.K.’s gross domestic product remains fragile, especially since talks of a “hard Brexit” emerged at the conservative party meeting earlier this month.

“The medium-term is just as bad, despite the upside quarter three picture,” Oliver Jones, economist at Fathom consultancy told CNBC on Wednesday.

Jones said that private service sector would be the main driver of the third-quarter GDP figure, and activity by these companies are set to go up by 0.8 percent in the same period.

The Bank of England raised last month its growth expectations for the third quarter to 0.3 percent from 0.1 percent. It cited that near-term economic activity had been stronger-than-expected.

via CNBC

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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 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