On the surface things were positive, with the Q4 reading being revised from 0.6% to 0.7% thanks to an unexpected improvement in the UK’s manufacturing output. Beyond that, however, there were disturbing signs dotted about here and there. First and foremost, for 2016 as a whole the UK’s growth now sits at 1.8%, not the 2.0% floated a few weeks ago, meaning the country is no longer the best performer in the G7 – that honour goes to Germany, with its 1.9% annual growth. Business investment in the UK also fell by 1% in the final quarter of last year while there are signs that consumer spending (the main driver of growth) is beginning to flag.
The main impact of all this was, as expected, felt by the pound. Having been up 0.2% against the dollar earlier in the session, sterling is now in the red by the same, while its gains against the Marine Le Pen-fearing euro have slipped from half a percent to 0.2%. Even the FTSE couldn’t take any glee in the pound’s retreat, the UK index sitting flat at 7280 – at least Lloyds remained buoyant, keeping hold of a 3.6% climb following its huge leap in full year profit.
Looking ahead to the US open and there is little on offer to challenge the GDP data for dominance, at least not until the latest Federal Reserve meeting minutes are released this evening. The Dow Jones is set to fall 25 points after the bell, taking it back under 20700, though the US index has been known to find a second wind later in the session