GDP data for the UK in the first quarter came out as expected at 0.5% which is a huge improvement from the previous -0.5%. Year over year, GDP was also up from 1.5% to 1.8%.
Immediately after the release of the news at 0830GMT, Sterling spiked 78 pips against the greenback within 2 seconds from 1.6441, then continued rising to 1.6557 at time of writing (20 minutes after news). EURGBP plunged 38 pips from 0.8916, and continued lower down to 0.8863.
The UK government had until now expected the economy to be choppy but today’s GDP data show that Britain is on the right road to recovery. This could prompt the Bank of England to show an increased willingness to change monetary policy later in the year and perhaps even consider raising interest rates at some point..