The UK economy grew by +0.8% for May. The vast majority of this growth came from the pubs and restaurants sector along with hotels which allowed people back indoors following the easing of COVID restrictions.
The growth means that the whole economy is now just -3.1% below where it was in February 2020 just before the COVID-19 pandemic.
This overall growth of +0.8% was slightly lower than the +1.5% that had been forecast by consensus estimates. It also capped a slew of data that has missed estimates this morning for the UK economy. Manufacturing Production and Construction also missed forecasts.
Overall in the three months to May, GBP grew by 3.6% due to a strong rebound in retail sales.
Market reaction: Mildly GBP negative
- A negative surprise has put downside pressure on GBP.
- Although initial selling pressure on GBP tried to be clawed back, we still see GBP with a mild negative bias following this data.
- GBP/USD now around -20 pips from the news.
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