Is the UK’s recession now over?
Monthly UK growth data shows a 0.2% climb in GDP, according to official figures.
However the return to growth is still anaemic and when adjusted to factor in inflation, GDP rose just 0.1% in the month. When considering other recent data showing the unemployment rate rose unexpectedly to 3.9 in January from 3.8% in December and annual average wages growth including bonuses fell to 5.6% from 5.8% in the previous month, slower than forecast, there still remains a risk.
(AI Video Summary)
UK GDP
The UK's economy has shown some positive signs recently, as the monthly GDP in January went up by a bit. However, when you take into account inflation, the gross domestic product (GDP) only slightly increased. This means that the data might change in the future. This is the first time we're hearing about economic growth since the recession was declared. Despite this good news, there has been an unexpected increase in unemployment and a decrease in wage growth, which are both negative indicators. It's surprising that the GDP went up in the midst of these negative signs, but the data might change later on.
The British pound
Not only that, but industrial production in the UK dropped in January compared to the previous month. The value of the British pound has been decreasing for three days in a row, partly because the US dollar has been strong. Right now, one GBP equals 127.76 US dollars, but it has been trending upwards since March 1st. If someone wants to bet against the British pound, a good idea might be to start buying it again if it reaches a price target of 127.12 US dollars. This level corresponds to the 61.8% retracement line, which is a good opportunity to enter the market and buy the British pound again. But this decision should depend on future economic data.
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