According to the Office for National Statistics,
Services sector output increased by 0.7% quarter-on-quarter in Q1 2024. Significantly, services output rose for the first time quarter-on-quarter since Q1 2023.
Production grew by 0.8%, with manufacturing the main contributor.
However, the construction sector contracted by 0.9%.
Net trade, household consumption, and government spending contributed to the headline GDP numbers.
Household consumption increased by 0.2% in Q1 2024.
In March, the UK economy expanded by 0.4% after growth of 0.1% in February. Economists expected the economy to grow by 0.1%.
Bank of England Monetary Policy Implications
The Bank of England left interest rates at 5.25% on Thursday (May 9) in a 7-2 vote favoring the status quo. While the quarter-on-quarter headline GDP numbers were upbeat, the March figures also beat expectations, questioning BoE concerns about economic slack. Nevertheless, inflation remains the focal point.
GBP/USD Reaction to the UK Q4 GDP Report
Before the UK data, the GBP/USD reached a high of $1.25295 before falling to a low of $1.25119.
However, the GBP/USD reacted to the UK GDP Report, falling to a low of $1.25137 before surging to a high of $1.25400.
On Friday (May 10), the GBP/USD was up 0.13% to $1.25400.
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