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Rabobank warns UK data leaves investors with a confusing growth picture

Rabobank said Eurozone GDP grew 0.4% quarter over quarter in Q2, while the UK showed a 0.7% upturn in the three months to May, despite weaker monthly sector data and PMIs in May and June.

Reported · Written up by our desk · Central Banks

Rabobank’s senior FX strategist Jane Foley said recent UK data is creating a mixed growth backdrop, comparing the UK’s performance with the Eurozone ahead of upcoming GDP reporting.

Foley pointed to Eurozone Q2 GDP growth of 0.4% quarter over quarter and a UK upturn of 0.7% in the three months to May. However, she noted that UK monthly indicators show sectoral contractions and that composite PMIs in May and June signal weakness.

She said the combination of the mixed signals leaves a confusing setting for forecasts, with wide dispersion in GDP estimates before the release.

FXStreet also cited market context around the time of the analysis, noting GBP/USD was trading near 1.3520 and that other major currencies showed modest moves following recent US inflation data.

Latest closeGBP/USD 1.351 ▲0.1%

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