UK economic data added to the frustration for pound currency trading in the European session by sinking it to its latest low since December 2020.
The Office for National Statistics (ONS) reported Gross Domestic Product (GDP) grew by 1.3% in the third quarter of 2021 from 5.5% recorded in the previous quarter, and also fell below market expectations for 1.5% growth.
This prompted the pound, which had previously been depressed by the dovish strengthening of the USD and the Bank of England (BOE), to go lower in today's trading session.
The UK economy has shrunk by almost 10% by 2020 but the International Monetary Fund (IMF) predicts it is on track to record the fastest growth compared to other G7 countries with forecasts to grow by 6.8%.
However, that rapid recovery has been hampered by the resurgence of Covid-19 due to the contagion of a highly contagious delta variant. It was also affected by global supply chain problems and labor shortages after Brexit.
Last week, the BOE said recent economic growth was weaker than expected and it would keep an eye on the situation in the labor market after the government’s job protection scheme ended on October 1st.
Meanwhile, Finance Minister Rishi Sunak expressed his opinion on the latest data released by saying that economic growth is on the right track.
