UK GDP grows 0.2% as expected – Sterling Update

UK GDP grows 0.2% as expected – Sterling Update

Here’s the latest currency news from our partner Moneycorp, to help you find out what your money is worth.

GDP growth data confirmed that the UK economy grew the expected 0.2% on the second quarter of this year, keeping the UK out of arms reach of a recession.

The results are indicative of sluggish growth, low productivity, and the continuing impact of the cost-of-living crisis on businesses and individuals. However, while the cumulative 0.75bps worth of hikes over the last quarter will have done little to improve GDP or the national mood, inflationary pressures are easing, and investors seem to share a collective hope that the UK will now avoid a recession altogether.

This could be down to how businesses are seen to be handling higher interest rates, demonstrating resilience in the current economic climate.

Next Week’s Key Dates

  • Monday 14th August – UK Wage & Unemployment Data

The challenging economic backdrop finally seemed to cool the jobs market last month, with unemployment increasing from 3.8% to 4% in June. Earnings, however, remained buoyant, rising by 6.9%, including bonuses, and growing concerns of a wage spiral fuelling already sticky inflation.

Next week we’ll see whether last month’s increase in unemployment, coupled with a climbing claimant rate, was indicative of the labour market beginning to turn as rising costs and interest rates and the broader economic climate impact businesses.

  • Wednesday 16th August – UK CPI Inflation Data

The UK’s Wage & Employment Data will be closely followed by more key data next week when the latest CPI Inflation data is released on Wednesday. We’ll be looking for signs of a downward trend beginning to take hold after last month’s larger-than-expected drop in headline inflation from 8.7% to 7.9%. If it continues to fall, it’s a sign that ongoing interest rate hikes are beginning to meaningfully lower inflation – even if it remains far from the Bank of England’s 2% target.

While this might be good news for the UK economy and the general public, falling inflation, especially if it’s lower than forecast, could be less good for pound sellers as it signals a potential end in sight for rate rises.

Last month, there was a decline in the pound’s value against both the dollar and the euro in the immediate aftermath of the CPI report.

Why Moneycorp?

With a Platinum Trusted Service Award 2020 from independent review site Feefo and 40 years of experience in the industry, FrenchEntrée has been recommending Moneycorp for more than 15 years. During this time they have helped thousands of client planning the best way to pay for their property as well as supporting them afterwards with any further payment from paying bills, mortgages to repatriating UK pension payments for those who have retired to France.

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Furthermore, we have worked with the same person at Moneycorp for more than a decade! You might be familiar with her as she often writes for our French Property News magazine. She has 13 years’ experience in foreign exchange, and is a qualified European lawyer with experience in European transactions. Mar will be happy to answer any questions or enquiries to support you through these difficult times

Opening an account is really easy and free of cost. You can register online or over the phone in a couple of minutes and for FrenchEntrée readers there are no transfer fees in any payment.

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