The British pound held steady despite mixed economic data, which pointed to ongoing challenges in the UK economy.
GDP growth for Q3 was revised down to 0%, indicating stagnation in economic activity.
The services sector, which is crucial to the UK economy, remained flat, while construction saw a 0.7% increase, and production contracted by 0.4%. However, a 1.9% rise in business investment may provide some support for the currency.
Trade data further clouded the outlook for the pound. The UK’s current account deficit narrowed by £5.9 billion to £18.1 billion in Q3. While the overall trade deficit for goods and services showed slight improvement, weak exports contributed to a bearish sentiment surrounding the currency.
In the bond market, the UK 10-year bonds yield remained near the 4.6% level after declining from a multi-month peak, reflecting cautious investor sentiment. Further pressure on bonds could arise if PMI data fails to show growth in the manufacturing sector.
