Considering the deeper than expected recession measured through second quarter GDP figures and the dour forecasts from British policy officials, independent economic groups and economists; it seems unnatural that the pound would advance on data.
Nonetheless, rally the currency did and largely due to economic indicators. The past London session held two notable readings: the industrial production readings for July and NIESR GDP report for August. Factory activity grew a greater than expected 0.5 percent through the period; but the real impression for the indicator was that this was the first back-to-back improvement since the September of 2006. The NIESR growth estimate doesn’t typically take on the mantel of market mover; but given the first positive reading in 14 months (suggesting growth in the quarter through August), we are reminded that few economies stand to benefit more from a global recovery than the UK.
