UK GDP Increases but Growth Eases

The UK’s economy has increased by 0.4% in the first quarter of this year according to their Office of National Statistics, but progress has been halted from the 0.6% figure that was recorded for the final quarter of last year.

Increases in services reached 0.6%, but this was offset by growth decreases in other major sectors of the economy.

As production spiralled downwards by 0.4% in the first quarter, construction output dropped by 0.9%, and agriculture also fell by a relatively slender margin of 0.1%.

Year on year, the level of GDP was 2.1% higher compared to the same quarter a year ago.

The latest GDP figures are estimated to be an increase of 7.3%, from the peak of the pre economic downturn of the first quarter of 2008.

Many analysts predicted a fall in output, as the referendum to leave the European Union continues to weigh heavily on the British economy.

Some commentators, such as those from Barclays, believed that the fall in GDP would be even greater, with expectations that GDP could have been down to 0.3%.

Disagreement is continuing on what these latest figures mean for future, whether this is a sign that the UK’s performance will no longer outstrip other G7 economies, or whether it is a temporary blip.

There have also been increases expectations for a rate rise in the UK, but the latest GDP figures are hardly likely to provoke more calls for an increase in rates.

Pound Settles Against the US Dollar

The GBP/USD is set for a turbulent day after the release of the GDP figures, with the UK pound currently buying $1.45, which is the level where it started the day.

The UK GDP Data, could be cushioned from numbers from the US Commerce Department, which revealed that the demand for durable consumer goods, did not rebound in March as was expected.

Even though there was an increase of 0.8%, following a decline of 3.1% in February.

Demand for automobiles, computers, and electrical goods has slumped in comparison to anticipations.

The EUR/USD rate began the day with the euro buying $1.13, before reaching a peak so far today CET of buying $1.133, now the euro fallen back  to purchasing $1.13.

Import Prices in Germany Down by 5.9%

Official figures have reported that Germany’s import price index fell by 5.9% in March 2016, compared the figures from a year ago.

Prices have decreased at a faster pace in contrast to the figures from January and February, where costs were reduced by 5.7% and 3.8% respectively.

 

Month on month, the figures were in reverse, as between February and March the figures hiked by 0.7%.

Also, the price index excluding crude oil and mineral oil products, decreased by 3.6% compared with the level of a year earlier.

The export price index decreased by 1.6% in March, in a comparison to the same month in 2015.

Whereas, in February and in January 2016 the annual rates of change were minus 1.2% and  minus 0.5%, respectively.

In a similar pattern to import prices, from February to March 2016, the export index rose month on month by 0.2%.