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Forex Flash: GBP triple dip recession averted? – Investec

FXstreet.com (Barcelona) - A triple-dip recession looks to have been averted with UK GDP estimated to have expanded by 0.3% quarter. Consensus and our own Economics team forecast had been for a +0.1% rise.

On a year over year basis output is up 0.6%, which is the biggest annual rise in GDP since Q4 2011. The better than expected outturn was driven by firm services output which stood 0.6% up on the quarter, with ‘distribution, hotels and catering’ the strongest performing sector recording firm growth of 1.1% (QoQ). Industrial output figures were also supported by a bounce back in North Sea oil.

Overall, “a welcome outturn, which we believe should mark the start of a run of modest quarterly growth outturns in the UK.” notes the Investec Research Team. Sterling rallied sharply on the news with GBP/USD below 1.5300 pre-figures and trading around the 1.5400 level currently.

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