UK Data Mixed As Growth Flat In Aug - Jul Revised Up To 0.4%
It was hard to expect any material reaction to the UK data this morning in the face of Brexit excitement and the prospects of reaching a deal with the EU. First up, growth in Aug was flat on the month against expectations of a 0.1% reading, though July was marked up a tenth to offset this.
Production data was the only obvious positive from today's releases with industrial output rising 0.2% in Aug, which translates into a 1.3% year on year reading. Even though manufacturing fell 0.2%, the yearly rate was higher than expected at 1.3% also.
Construction output was also down though, yet this was largely anticipated after 3 consecutive months of expansion.
Trade figures also missed on expectations as the balance widened to -£11.2bln from a downwardly revised -£10.39bln. Non-EU trade also fell to see the deficit widen out to -£4.22bln vs -£3.14bln against a forecast of a modest narrowing.
GBP is pretty steady in the wake of the data. First thing this morning we saw buyers pushing for better levels after reports of Labour MPs looking to rebel against the opposition leader Corbyn and side with PM May and the Chequers plan, though in itself, this looks to present more problems than anything itself given the EU's rejection of these proposals.
EUR/GBP has been hit down towards 0.8700 this morning - support noted ahead of this, taking the momentum out of the selling ahead of the data. Cable also struggled ahead of 1.3200 as the USD started to fight back again across the board.