Britain Avoids Triple-Dip Recession; Pound Rallies

UK pound is getting a boost today, thanks to the latest economic data. Indications that the economy grew, rather than contracted, are helping the pound, as it might mean an end is in sight for the current quantitative easing program.

According to the Office for National Statistics, the UK economy expanded by 0.3 per cent in Quarter 1. Expectations had been for an increase of 0.1 per cent, and some pessimistically proclaimed that the economy would slip into a triple-dip recession. The fact that economic growth exceeded expectations is a big help to the pound.
Even with this good news, though, the pound struggles with gaining a foothold. The economy is still in a delicate state of growth, and the Bank of England hasn’t shown any indication that the easing program will be stopped anytime soon. With stimulus still being used, it will be hard for the sterling to make any real progress.
For now, though, there is support for the pound, and many are waiting to see what happens this summer when Mervyn King leaves the BOE to be replaced by Mark Carney.
At 15:42 GMT GBP/USD is up to 1.5441 from the open at 1.5269. EUR/GBP is down to 0.8423 from the open at 0.8525. GBP/JPY is up to 153.5600 from the open at 11.9450.

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