Sterling lifted by GDP data

Finally some good GDP news from the UK economy!Sterling lifted by GDP dataAs Wise Money posted yesterday- the ONS reported in its preliminary estimate that the UK economy grew by one percent in the third quarter, boosted mainly by the Olympics and Paralympics.

The consensus estimates were for around 0.6% so the number lifted Sterling across the board and the Pound is clinging onto its gains in early trading this morning.

The data may mean the Bank of England will pass on further easing, which was widely expected before this GDP number was announced, when they meet early next week.

Which should also boost Sterling and the money markets.

Delving into the numbers further, however, reveals the ONS estimates of London 2012 tickets sales (which were only accounted for this quarter despite being sold in tranches over the past year or so) adding 0.2 per percentages points to the total number.

So a large, one off item is giving the GDP number its shine.

Some of the move higher by the Pound was triggered by Prime Minister David Cameron during Wednesday’s PMQ’s after he inadvertently suggested there was “good news” on the way.

Given that he was one of the few minsters privy to the ONS data ahead of the embargo, the revelation is a school boy error on Mr Cameron’s part and has led to A Rap On The Knuckles by the head of the ONS, who wrote to the PM and suggesting a reform of the current process.

Looking forward to next week we have the Bank of England and ECB rate decisions on Thursday, the US non-farm payrolls and it also marks the last full week before the US election.

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