Forthcoming UK GDP Growth Revision

Discussion and Analysis by Charles Porter: 

Sterling Rates Calm as Markets await Bigger News.

 

The Office of National Statistics is scheduled to release a revision of quarter two economic growth this morning. Economic growth figures can be calculated from the release of seasonally adjusted Gross Domestic Product data measured in chain linked volumes. The inter-quarter differential for 2017 currently stands at £1415m. Inter-quarter percentage economic growth on the back of this change stands minutely above 0.3%.

 

Sterling currency markets are unlikely to be affected by today’s revision because the dominant market expectation sees no change to this figure. In the event of an unanticipated upward (or downward) revaluation to GDP growth, the propensity for sterling to receive a boost (or slump) could either mediate (or exacerbate) yesterday’s dramatic losses vis-à-vis the Euro.

 

For now, markets look more intently towards the Jackson Hole symposium at the U.S Federal Reserve. Mario Draghi, president of the European Central Bank, will speak at the event tomorrow. Draghi’s speech yesterday contributed to a bullish Euro by praising, and not undermining, the Quantitative Easing purchasing program. However, with the ‘just below 2%’ inflation target threatening to stray away, markets watch whether Draghi will acknowledge or, better, detail the need to remove this stimulus.

 

Speaking at this event too will be Janet Yellen, the Federal Reserve chair. Wyoming’s high-powered event will therefore attract media and investor attention whilst the German election draws closer. Therefore, with considerable news events approaching, bigger currency market fluctuations are credible in the near future.