Continuum Economics
  • Search
  • About Us
  • Buy
  • Invite A Friend
  • My Basket
  • Articles
  • Calendar
  • Forecasts
  • Events
  • Data
  • Newsletters
  • My Alerts
  • Community
  • Directory
  • About Us
  • Buy
  • Invite A Friend
  • My Basket
  • Articles
    • All
    • Thematic
    • Tactical
    • Asia
    • EMEA
    • Americas
    • Newsletters
    • Freemium
    • Editor's Choice
    • Most Viewed
    • Most Shared
    • Most Liked
  • Calendar
    • Interactive
      • China
      • United States
      • Eurozone
      • United Kingdom
    • Month Ahead
    • Reviews
    • Previews
  • Forecasts
    • Forecasts
    • Key Views
  • Events
    • Media
    • Conference Calls
  • Data
    • Country Insights
    • Shadow Credit Ratings
    • Full CI Data Download
  • Newsletters
  • My Alerts
  • Community
    • FX
    • Fixed Income
    • Macro Strategy
    • Credit Markets
    • Equities
    • Commodities
    • Precious Metals
    • Renewables
  • Directory
  • My Account
  • Notifications Setup
  • Account Details
  • Recent Devices
  • Distribution Lists
  • Shared Free Trials
  • Saved Articles
  • Shared Alerts
  • My Posts
Published: 2024-02-15T07:23:39.000Z

GBP flows: GBP downside risks after weak GDP

byAdrian Schmidt

Senior FX Strategist
-

Revisions lead to lager than expected 0.3% decline in UK Q4 GDP, suggesting downside risks for GBP

 

While UK December GDP was less weak than expected, falling 0.1% m/m, Q4 GDP was weaker than expected at -0.3% q/q due to back revisions, confirming a UK recession in H2 2023. This makes the strength of the UK PMI data in the last few months look rather misleading, and the strength of the pound this year similarly.

EUR/GBP has so far only risen modestly in response, but given the starting point, which was a little low relative to the recent correlation with yield spreads, and the net long positioning evident in the CFTC data, the risks look to be towards further GBP losses. While the BoE MPC may not be much swayed by the GDP data, focusing more on inflation prospects, the weaker than expected CPI data yesterday and the evidence in the labour market data that earnings are stabilising suggests there is likely to be a more dovish take at the next meeting in March, preparing for a potential May rate cut.

CFTC net speculative positioning 

Continue to read the article for free
Login

or

or

Topics
Foreign Exchange
FX DM
Flows
GBP/USD-Commentary
EUR/GBP-Commentary

GENERAL

  • Home
  • About Us
  • Our Team
  • Careers

LEGAL

  • Terms and Conditions
  • Privacy Policy
  • Compliance
  • GDPR

GET IN TOUCH

  • Contact Us
Continuum Economics
The Technical Analyst Awards Winner 2021
The Technical Analyst Awards Finalist 2020
image