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UK Q3 GDP comes in at respectable 0.7% QoQ - ING

FXStreet (Łódź) - Rob Carnell from ING comments on the UK Q3 GDP data released in the European morning and showing 0.7% growth, in line with forecasts.

Key quotes

"However, the UK Chancellor may view this as a mixed blessing, after being given a bigger bill for the EU budget thanks to the UK’s relative outperformance of its European Union peers. This will be especially irksome since despite the stronger growth figures, there has not yet been an accompanying improvement in the UK public finances to match."

"Furthermore, despite this good growth performance, recent UK data have been a bit less upbeat."

"Indeed, the UK August index of services slowed a bit to 0.8% from 1.0% in July, and it does seem that despite a decent domestic recovery, weakness in Europe will probably take some of the shine off UK growth."

"As such, we don’t see these GDP numbers as having a direct bearing on the timing of the BoE’s first rate hike, especially as they are to be taken with a large pinch of salt at this first estimate, given how much guesswork they contain by the ONS."

"That said, if the mixed data continue to roll in, and if the Eurozone shows no signs of renewed growth, this could push back rate hikes, in line with recent suggestions by the BoE’s Chief Economist Andy Haldane, perhaps beyond next year’s General Election. For the time being though, we stick with our February 2015 call."

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