Pound Sterling Jumps Vs Euro And Dollar As UK Exits Recession

The Pound to Dollar (GBP/USD) exchange rate advanced to 1.2540 from 1.2520 while the Pound to Euro (GBP/EUR) exchange rate advanced to just above 1.1630 from 1.1620.

According to the ONS, UK GDP increased 0.4% for March compared with consensus forecasts of a 0.1% increase and the February increase was revised to 0.2% from 0.1% previously.

Industrial production increased 0.2% for the month, although there was a 0.4% contraction in the construction sector.

Growth was, therefore, driven by gains in the services sector with a strong 0.5% growth spurt for March.

The largest positive contribution in services in March 2024 came from human health and social work activities, helped by the absence of strikes.

First-quarter GDP increased 0.6% compared with market expectations of a 0.4% increase.

For the quarter, services posted a 0.7% increase while production increased 0.8%, but construction output declined 0.9%.

There were no further revisions to the second half of 2023 at this stage, with the UK still registering a technical recession.

This growth figure was stronger than pencilled in by the Bank of England.

Above: GBP/EUR chart showing sharp jump higher after UK GDP data released on Friday.

More updates to follow…