The Office of National Statistics (ONS) noted on Thursday confirmed the UK economy GDP grew 0.4% in Q1 2016, slower than the 0.6% pace in Q4 2015, the same as the first estimate showed in April. On annualized basis, UK’s GDP expanded 2%, which was revised down from the initial reading of 2.1%.
The key service sector which is considered the main driver of the British economy is consistent with the assumed 0.6%q/q expansion for Q1 in the preliminary GDP release. However, industrial output and construction both saw output decline 0.4 per cent and 1 per cent respectively.
GDP data confirmed that the UK’s economic recovery lost steam in the first quarter, mainly in response to an unexpected contraction in business investment. While deterioration in the production and construction sector activity also to weigh on the overall growth. Markets now await he final release which will be published in June.
Following the release of the data the pound sterling was sold off modestly into the red after trading higher on the day. It then pared losses to currently trade at 1.4703 versus the US dollar at 1145 GMT.
The material has been provided by InstaForex Company – www.instaforex.com