UK data perks up but markets retain Brexit focus

• UK GDP M/M:+0.2% vs 0.0% exp

• Both industrial and manufacturing production also top forecasts

• However, markets remain Brexit focused as EU summit begins

A batch of economic releases have painted a slightly better than expected picture of the UK economy with growth and production measures both topping estimates. However, the gains seen in the pound have been relatively small and measured in response, with currency traders remaining far more interested in the latest developments on the Brexit front. UK stocks overall are little changed with the FTSE looking to regain its poise above the 7400 mark after Tuesday’s losses.

Growth figures extend recent recovery

In what is the tenth release of month-on-month GDP figures from the ONS, there’s been a some good news for the UK economy with an increase of 0.2% for February - above the 0.0% expected. This follows on from a 0.5% rise in January and an upwards revision to December’s decline and while the nature of this data means that it is inherently volatile, the overall trend has no doubt improved. Having said that, the pace of growth is still sluggish at best when viewed at a rate of 0.3% for the past 3 months and this is also artificially inflated by Brexit stockpiling so the true figure is likely lower.  

There’s been a bit of a pick-up in both industrial and manufacturing production in recent months but before attempting to extrapolate this it is worth keeping in mind that future prospects will be heavily determined by Brexit developments. Source: XTB Macrobond  

EURGBP has been moving higher in recent trade with price trading back near prior resistance around 0.8655. Source: xStation