Yesterday, UK’s first reading of 13 GDP was released. Economists’ expected that this will drop from Q2’s 0.7% to over a one year low of 0.3%. However, the first post-Brexit GDP data exceeded markets consensus and posted a reading of 0.5%, helping to provide a much needed boost to the fragile Pound. The rate of growth for the year also beat expectations growing at 2.3% compared with the anticipated 2.1%. As a result, the UK’s finance minister Philip Hammond stated that the result of these figures proved the fundamentals of the UK economy are strong and resilient. The expansion in the economy was led by the services sector, which added 0.8% to growth for Q3.
Across the pond, the US released two pieces of high tier data. Firstly, US unemployment claims posted a better than expected 258k, adding to the bullish US labour data trend of late. Simultaneously, core durable goods registered a 0.2%, bouncing back from the previous negative figures. However, the main gauge for the month of September unexpectedly fell by -0.1% as orders for business equipment in the UK fell by its most in seven months, pointing to signs that corporate investment is having trouble gaining any momentum.
We finish the week with one piece of high tier data from the US. The States post their first reading of Q3 GDP, which is expected to increase rapidly to 2.5% from last quarter’s 1.4%. Arguably this is the week’s most important statistic, with the reading forecast to rebound from the US’s poor first half performance.