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UK GDP data shows the British stiff upper lip index was up ahead of Brexit

The consumer and investment led the way into the vote

Taking some time to pour over the other details of the GDP report, there's further evidence that the UK's stiff upper lip was on show into the vote.

  • Total production rose 2.1% q/q and 1.8y/y (-0.4% & 0.1% respectively in Q1)

  • Construction remained weak at -0.7% vs -1.05 prior q/q & -1.4% vs -1.8% prior y/y

  • Employee compensation rose 1.6% q/q vs 0.7% prior & 3.9% vs 3.3% prior y/y

I've long maintained that the fear factor was grossly overdone and the GDP evidence backs it up. If that has now been shown for what it was, it could well change some sentiment about the worries for the economy going forward. It may not bring a massive change but rather than thinking the economy is going to fall into a fiery abyss, people and businesses might instead thing it's just going to trip over the kerb. That change may be enough to lessen the impact going forward.

As I mentioned in the data post. There is so much water to go under the bridge we can't be certain how anything pans out. We're still a long way fro seeing the full effects from the move in the pound and how that will affect trade and inflation but even so, just like trading, a positive sentiment, it can make all the difference to your mindset.

The GDP numbers aren't overly important for the pound right now but in the bigger picture, it's another supporting factor.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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