The GBP has been down in the slumps ever since the Brexit vote in 2016. This week it made unexpected gains against the dollar based on positive economic data from the United Kingdom.
The UK released their GDP data for the third quarter of 2017, which surpassed investors’ expectations, with economic growth coming in at 0.4% instead of the 0.3% predicted. This shows that the British economy is in a somewhat better condition than previously thought and increases the probability of an increase in interest rates by the Bank of England. Britain’s central bank will be meeting on November 2 to decide.
The British pound sterling strengthened against the dollar and the euro alike, although it is still very far from its pre-Brexit highs.
Nevertheless, the British economy is still marked by Brexit and tough negotiations with the European Union. It is possible that the Bank of England will actually have to lower interest rates again as Brexit approaches and the country starts experiencing the problems resulting from that.
