Money News Overview Thursday 15th February 2024: UK enters a recession

CPI inflation, which was the most significant piece of data, came in significantly below the market consensus at 1.7 percent.

Following an impressive start to the year for the UK in terms of economic data, todays Growth figures have revealed the UK has fallen into a recession.

This morning, a flurry of UK economic data has been released. UK GDP came in negative and showed that growth in the UK fell by 0.3 percent in the fourth quarter of 2023.

It means that the UK has now entered a recession, as there has now been two consecutive quarters of negative growth. This will be the first time there has been a recession in the UK since the first half of 2020, when the Covid-19 lockdown occurred.

 This was expected; however, today’s figures were worse than the -0.1 reading markets had pencilled in. This explains why the pound has taken a tumble this morning, following the latest data.

2023 was tough for the UK following the cost-of-living crisis. The side effects of higher interest rates deployed to tackle that have also hit spending, incomes, and profits.

The UK is not alone, the EU narrowly avoided recession in the second half of the year.

Markets will now shift their attention to the Bank of England in anticipation of when they will look to cut interest rates.

 GBPEUR dropped to a weekly low after achieving an 18-month high since August 2022 earlier this week. GBPUSD is close to its lowest level since mid-December.

 Later this afternoon, investors will shift their attention to US Retail Sales. Markets expect this to fall to -0.1 percent in January, down from 0.7 percent in December. US industrial output is anticipated to rise by 0.3 percent.

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