GBP flows: GBP lower after weak October GDP

UK GDP has come in weaker than expected in October, falling 0.1% m/m due to a 0.3% decline in services and a 0.6% decline in construction. These offset the 0.5% recovery in manufacturing production helped by the return to production at JLR after the September cyberattack, and a 1.1% rise in total industrial production helped by strong energy production. The weakness in services and construction is concerning, and more relevant than the volatility in the industrial data. GBP is lower as a result, but with a rate cut essentially already fully priced in for next week, we wouldn’t see a lot of downside, with the 0.88 level unlikely to be threatened.