UK growth drops further than expected

Key Movers

In the UK figures released yesterday showed wage growth climbed to 8.5%, a fresh three-month record high. However, GDP figures released this morning showed the UK economy contracted by 0.5% ( the fastest pace in 7 months ) vs. expectations for a decline of 0.2%. The Eurozone’s economic outlook has become rather bleak after industrial production and business activity fell in Germany, the Eurozone’s largest economy. Adding to the Euro’s woes we see German ZEW economic sentiment data is also due and is expected to fall to -75 from a previous figure of -71.3.

This week the European Commission also revised down its 2023 GDP projections from 1.1% to 0.8%. This leaves a rather complicated decision for the ECB who decide on interest rate policy this Thursday.

In the US markets wait for key inflation data due tomorrow. The Dollar remains supported as the US economy is not slowing as much or as fast as the Eurozone or Asia.