UK Gross Domestic Product
QoQ YoY
Actual: 0.7% 2.8%
Consensus: 0.6% 2.8%
Previous: 0.7% 3.0%
UK GDP printed slightly above expectations, as Quarter-over-Quarter growth matched Q4, 06 numbers at 0.7 percent expansion. The year-over-year rate came in exactly in line with consensus, however, leading us to believe that the Quarterly figure was only very marginally stronger (i.e. rounded up from 0.65 percent to 0.7 percent). Notables on the report included a minor slodown in Services growth, with Q1 showing 0.8 percent versus 0.9 percent previous. Total Production remained flat, but this is actually an improvement from Q4’s 0.2 percent decline. Slowdowns in Industrial production are of the few threats to future UK economic expansion.
Our own biases aside, the number has enough to spark a sharp GBPUSD bid in the brief moments to follow. The surprise on the Quarterly number was enough to send the pair 20 points higher in the wake of the report, with a near-immediate retracement leaving it more or less flat at time of writing. Given that the surprise is marginal to say the least, it seems fairly reasonable to believe that this in and of itself will not be able to drive Cable through resistance at 2.0070 through very short term trade.