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UK growth slowed, upturn remains on track – Danske

FXStreet (Córdoba) - According to analysts from Danske Bank despite the slowdown that 3Q GDP numbers showed in the United Kingdom the economic upturn remains on track.

Key Quotes:

“The figures show that growth in Q3 slowed to 0.5% from 0.7% q/q in Q2, in line with our expectation but below the consensus expectation of 0.6% q/q. This implies GDP in Q3 15 was 2.3% higher than in Q3 14 and 6.4% higher than the pre-crisis peak in Q1 08. Although growth slowed, it is still at trend and the economic upturn in the UK remains on track.”

“Going forward, we expect the UK to continue to grow at or slightly above trend growth, mainly driven by domestic demand (especially private consumption). Private consumption is stimulated by a combination of low interest rates, very high consumer confidence, increasing house prices, high employment and positive real wage growth for the first time since 2009.”

“As the labour market continues to tighten and the underlying wage growth is trending up, we think the case for a hike is building and thus we still expect the BoE to hike in Q1 16, probably February.

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