GBP tries to recover after disappointing UK GDP figures

GBP tries to recover after disappointing UK GDP figures

The Pound is attempting to recover after today's disappointing preliminary UK GDP report provided another worrying sign for the post-pandemic recovery, showing a growth of 1.3% compared to the expected 1.5%. Furthermore, as the economy contends with rising inflation, supply shortages and labour issues, pressure remains on the Bank of England to adjust monetary policy after it chose to remain on hold in the latest meeting.

Consumer spending rebounds despite supply issues and rising costs

While UK GDP figures came in below expectations, consumer spending managed to rebound significantly in October with an increase of 14,2% as a rise in demand for takeaways and digital entertainment boosted spending. Despite ongoing inflation concerns and rising household bills, consumer spending increased in several sectors but fell slightly when it came to retail spending as interest in goods such as clothing decreased while the travel sector had it's best month since before the pandemic with spending on international travel recovering noticeably. These figures provide an encouraging sign for the economy as it heads into the festive season but as supply shortages,rising inflation and labour issues persist, it will be essential to see how the government and BoE adapt to the situation moving forward.

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Walid Koudmani

Market Analyst working in UK-Italian-Arabic markets covering a broad range of assets including stocks, commodities, FX and crypto. English, Italian and Arabic Speaker with a B.A in Business Management. Quoted in many prestigious publications including the Guardian, Barrons and Lefigaro and winner of bloomberg top forecast rank Q-2/Q-3 2020.