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April 2016

UK growth slows to 0.4%

Published: Wednesday 27 April 2016

UK GDP grew by 0.4% between January and March, down from 0.6% in the fourth quarter.  This was in line with expectations and signals the 13th consecutive quarter of positive growth for UK economy.
 
Part of the slowdown was down to a fall in construction output, which fell 0.9% in the first quarter and industrial output declining by 0.4%. 
 
The services sector however, which forms the biggest part of the economy, grew by 0.6%.
 
According to the Office of National Statistics there was no evidence to attribute the slowdown to the EU referendum.
 
This evening we have the Interest rate decision from US and FOMC statement.  The Fed Funds futures market shows 0% chance of a rate hike today, and only 22% change of one in June.  Even then inflation is not at its target level of 2% but it is picking up.  The statement itself, however, may reject these odds and will be closely scrutinized for any hints of a possible, yet unexpected, hike in June.
 
We also have New Zealand’s Interest rate decision tonight. The market is only calculating a 30% chance of a rate cut so it is unlikely we’ll see any change.
 
Latest FX news by Joe De Berniere

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