The Pound’s plunges after the UK announced a sharp slowing in GDP growth. No amount of squabbling over how much of a factor the extreme weather was can mask one blunt truth – Britain’s economy is slowing badly.
Contributor David Lamb, head of dealing at FEXCO Corporate Payments.
With separate data showing that the number of companies going to the wall – and individual insolvencies – is up sharply, this throws an almighty spanner into the narrative of the UK’s steady upward progress.
Suddenly Britain’s growth looks brittle and bruised. The Bank of England, which barely a month ago was hinting bullishly at a May interest rate rise, will now be very wary of doing anything that could jeopardise things further.
With inflation falling of its own accord, the chances of a May rate rise have all but evaporated. The Bank’s rate setting grandees will want to see what happens to economic growth in the second quarter of the year before committing to a rate rise – meaning a hike is now unlikely to come until Autumn.
All this has hit sterling like a bucket of cold water. After a month of at times frothy exuberance, sterling is ending April on a sharply downward trajectory. Sterling confidence has been popped with balloon-like ease.”
