The batch of economic data from UK is all the way poor. GDP grew only 0.2% qoq in Q4, below expectation of 0.3% qoq, and a sharp slowdown from Q3’s 0.6% qoq. In December, GDP contracted -0.4% mom , much worse than expectation of 0.0% mom. Annually, GDP growth slowed to 1.4%, lowest since 2012.
ONS Head of GDP Rob Kent-Smith said in the release that ” manufacturing of cars and steel products seeing steep falls and construction also declining.” Also, “declines were seen across the economy in December, but single month data can be volatile meaning quarterly figures often give a better indication of the health of the economy.” Full release here.
Also from UK,
- Industrial production dropped -0.5% mom, -0.9% yoy in December versus expectation of 0.1% mom, -0.5% yoy.
- Manufacturing production dropped -0.7% mom, -2.1% yoy in December versus expectation of 0.2% mom, -1.1% yoy.
- Construction output dropped -2.8% in December versus expectation of 0.1% mom.
- Trade deficit narrowed to GBP -12.1B in December versus expectation of -12.0B.
Pound’s reaction to the data is mild though. Despite a dip, GBP/USD is currently kept well above 1.2854 temporary low.
ECB de Guindos: Wage growth increasingly broad-based, inflation to rise over medium term
ECB Vice President Luis de Guindos sounded confidence in his comemnts on inflation today. He sid that “wage growth has become increasingly broad-based in recent years.”
And, “this, together with our monetary policy measures and the ongoing economic expansion, is expected to translate into higher underlying inflation over the medium term.”