UK growth contracts in August, production falls
This morning's release of the UK GDP saw growth contract by 0.1%, whereas forecasts were looking for a flat month. However, due to base effects (when previous months fall out of the calculations), the year on year figure rose from 1.0% to 1.1%.
Alongside this, industrial production on the month fell by a larger than forecast 0.6%, with the markets looking for a fall of 0.2%. Manufacturing fell by 0.7% vs a 0.1% rise expected, resulting in annualised figures of -1.8% and -1.7% as of August respectively.
One bright spot, however, was in the trade data, with the deficit coming in at -£9.81bln - below expectations, but this was still a rise on the prior month. No EU trade saw a marginal contraction in the deficit, falling from -£2.54bln to -£2.21bln.
Despite the data, there is no response from GBP this morning as traders are focusing purely on the developments surrounding Brexit. As we have seen in recent sessions, sellers are not able to generate much momentum on the downside as they believe the UK PM will be forced to ask for an extension, which the EU seems ready to do give its own fears over a no-deal exit.