Sterling is set for a further fall if growth figures disappoint in ONS’ initial estimate report

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The pound could come under further pressure this week if growth figures disappoint


Sterling is set for a further fall if growth figures disappoint in ONS’ initial estimate report

  • The ONS will release an estimate of second quarter GDP on Friday
  • It is set to say the economy bounced back after the cold spell stifled growth
  • Consultancy Capital Economics said growth is likely to have hit 0.4 per cent 

Alex Hawkes For Financial, Mail On Sunday

The pound could come under further pressure this week if growth figures disappoint.

The Office for National Statistics will release its initial estimate of second quarter gross domestic product on Friday and is expected to say the economy bounced back after the cold spell stifled growth in the first three months of the year.

Consultancy Capital Economics said growth is likely to have hit 0.4 per cent, up from 0.2 per cent in the first quarter.

The pound could come under further pressure this week if growth figures disappoint

The pound could come under further pressure this week if growth figures disappoint

The consultancy said in a note to clients: ‘The pick-up is likely to have been driven by stronger growth in the services (and particularly retail) sector alongside a recovery in construction.

‘In contrast, the industrial sector looks to have subtracted from growth, but we expect to see indications of the contraction in the sector bottoming out in June.’

The pound fell below $1.30 in trading last week despite Thursday’s quarter point rise in interest rates. 

Higher rates usually strengthen a currency as investors want to hold it to earn the higher income. 

But the rise had been widely expected and factored in. 

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