UK GDP growth is flat in 2nd Quarter. Pound falls in Forex Trade. | CountingPips Forex Blog

August 22, 2008 - Forex Economic News

UK GDP growth is flat in 2nd Quarter. Pound falls in Forex Trade.

The U.K. Gross Domestic Product showed a revised 0.0 percent growth in the second quarter from the first quarter of 2008 according to a report released by the Office of National Statistics today. The previous estimate released in July had shown a GDP growth of 0.2 percent in the April to June quarter.

UK Pound forex trade The U.K. GDP growth failed to surpass this year's first quarter expansion of 0.3 percent as manufacturing, construction and total production declined in the quarter and posted the lowest GDP growth since the 2nd quarter of 1992. The U.K. GDP grew at an annual rate of 1.4 percent over last year's second quarter following the first quarter annual growth rate of 1.6 percent.

The GDP number was below market forecasts which were predicting a 0.1 percent quarterly growth and 1.5 percent annual growth. Total production output declined in the second quarter by 0.8 percent with manufacturing output falling by 0.8 percent and construction output falling by 1.1 percent. Construction and manufacturing output had each grown by 0.4 percent in the first quarter while total production output had fallen by 0.2 percent in the first quarter. Total services output increased in the second quarter by 0.2 percent following the first quarters decline of 0.3 percent.

The report also showed that the real U.K. trade deficit in the 2nd quarter registered 10.1 billion pounds. This was less than the first quarter deficit of 11.1 billion pounds. Exports of goods and services in the second quarter fell by 0.5 percent and imports decreased by 1.4 percent.

The Pound Sterling falls in Forex Trade.

The pound sterling has been losing ground to the other major currencies today in the forex market after the revised GDP numbers. The euro has increased against the pound as the EUR/GBP currency pair has advanced from 0.7930 at the open of today's trading to 0.7972 in the morning of the U.S. trading session. The pound has fallen verses the dollar as the GBP/USD pair has gone from opening at 1.8780 to 1.8585 this morning. The pound has increased the Japanese yen today despite the negative economic data to advance to trading at 204.39 yen per pound. Elsewhere, the GBP/CHF has fallen from approximately 2.0419 to 2.0370 francs per pound this morning.

EUR/GBP Chart - The euro gained against the pound sterling this morning in forex trading after the UK revised its 2nd quarter GDP growth lower.(1Hour Chart)

Forex Chart

tags: UK GDP, output, growth, exports, forex trade

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