The Pound has risen on international money markets as Britain has pulled free of double dip recession with the best quarterly growth for five years
Sterling to Euro exchange rate (GBP/EUR) and Sterling to Dollar exchange rates (GBP/USD) have risen by over 1%.
The Pound stands at US$1.61 and 1.24 euros.The figures follow the Pound hitting a five month low against the euro and a one month low against the dollar just a few days ago.
Although the economy is on the rise, the figures are still disappointingly low and the economy still has a way to go before rising above the sluggish performance of recent years.
Sterling gains
Official figures put GDP at 1% for the third quarter, compared with the previous quarter. Manufacturing output is estimated to have increased 1.1% over the same period – against a 0.7% decrease between the first and second quarters.
Crucially, GDP for the third quarter of 2012 is flat compared with that of the same quarter 12 months ago.
“Sterling gained across the board after the release of much better than expected GDP growth figures for the third quarter which showed the economy grew at 1%,” said Andy Scott, of foreign currency exchange brokers HiFX.
“This was above even the most optimistic forecasts for the three months which included the impact from the Olympics. This brings to an end the double dip recession that had gripped the UK for the last nine months and will provide a ray of economic light in the autumn dim.”
Best GDP figures since 2007
“These are the best growth figures since 2007 and even if you strip out the forecasted contribution of 0.3% from the Olympics, the figures are very positive. Employment has been improving for several months despite the economy being in recession and makes a lot more sense with the growth registered in the quarter.
“This must now pretty much kill any expectations that the Bank of England will announce more monetary easing when they meet next month which should benefit Sterling against many major counterparts whose central banks are pumping money in, or cutting interest rates
“Whilst the Governor of the Bank of England reminded us this week that he expects the GDP numbers to remain choppy, we can only hope this is the beginning of the recovery and that more positive surprises on the economy await.”
