GBP/USD has been trading near 1.22 for some time now. After Bank of England decision, it's time to examine health of the UK economy.
FXMAG.COM: After a 50bp rate hike, could promising GDP print provide further support for GBP?
Michael Hewson (CMC Markets): Possibly as there a lot of bad news priced into the UK economy, and both OBR and Bank of England have said the economy is in recession given the 0.3% contraction in Q3. In truth they could well be wrong given some of the recent data from October and November which was better than expected.
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If the economy does grow in Q4 a technical recession is avoided but ultimately it still amounts to semantics. Whichever way you look at it the outcome of the GDP numbers the nuance is likely to be lost on a lot of people given how finances are coming under strain. What we do know is that any growth is likely to be anaemic, and 2023 is still likely to be very challenging.