UK Economy

The UK government has announced "unprecedented" support for UK businesses as it limits the cost of fuel bills in a move that will underpin economic growth but materially raise the country's debt burden.

A sharp decline in UK retail spending suggests the UK consumer is withdrawing in the face of surging prices, tipping the UK economy into recession.

GBP was softer after it was reported headline UK CPI inflation was lower in August than in July, suggesting the peak in price rises might have now passed.

UK jobs data was on balance supportive for the Pound, with the currency rising against the Euro, Dollar and most other major currencies in the wake of the release.

The British Pound was soft at the start of a new week following the release of domestic GDP data that showed July's economic rebound was softer than expected.

"Coming in with a bang," says Holger Schmieding, Head of European Economics at Berenberg, addressing reports that incoming UK Prime Minister Liz Truss could make a major intervention in UK energy markets.

The UK economy expanded in August, according to a much-watched survey of activity.

Despite surging inflation, UK retail sales surprised by growing in July, although a much-watched measure of consumer confidence plummeted to an all time low.

GBP was higher after it was announced UK inflation hit 10.1% in July, leaving it more than five times higher than the Bank of England's target.

The British Pound remained supported against the Euro and Dollar following the release of new data from the ONS that showed UK wages faster than expected in June, as job vacancies remain elevated in a low-unemployment environment.

The UK economy contracted less than was expected last quarter but its foundations are weakening with financial distress growing as a constraint within the small business sector and lynchpin of the labour market.

GBP was supported near recent levels against both the EUR and USD on Friday following the release of some better than expected UK GDP data that suggests the economy approaches a tough winter period in better shape than feared.

The Bank of England's forecasts of a long and enduring UK recession has been branded unrealistic by Savvas Savouri, Chief Economist and Partner at hedge fund Toscafund Asset Management.

Workers are returning to the jobs market, headline inflation to plunge in 2023, Bank of England to end rate hike cycle sooner than expected.

The British Pound is set to remain under pressure as the UK economy faces significant headwinds, as confirmed by the latest retail sales figures.

GBP was seen trading firm on the day UK inflation data came in above expectations, confirming the Bank of England might have to go ahead with an outsized 50 basis point rate hike in August.

The surprisingly strong UK GDP data announced midweek leads economists at Goldman Sachs to revise higher their growth forecasts and lower expectations for a recession taking hold.

The British Pound was firmer in midweek trade, in line with some better than expected economic data.

The UK's current account deficit has long been an 'achilles heal' for the British Pound, and new data shows it has surged in size.

UK house prices will fall in the second half of 2022 as a surge in mortgage rates continues over the summer says Pantheon Macroeconomics.