The reason for the cable spike above 1.6600 earlier it would appear

Thank-you BCC !

  • BCC upgrades 2014 GDP growth forecast from 3.1% to 3.2% – the highest growth rate since 2007
  • Growth forecast for 2015 upgraded from 2.7% to 2.8%, but remains unchanged for 2016 at 2.5%
  • First increase in official interest rates to 0.75% expected in Q1 2015
  • GDP growth will continue at a strong pace of 0.8% in Q3 2014
  • Exports of goods and services downgraded: from 1.9% to 0.8% for 2014, from 4.2% to 4.1% for 2015

But there’s a but!

John Longworth, Director General of the BCC said:

Our forecast confirms that Britain has become one of the fastest-growing developed economies. We are leading, rather than following, other major economies when it comes to short-term growth. Businesses up and down the country should be congratulated for their hard work and determination in driving the UK recovery despite a number of international and domestic challenges.

The task at hand is to ensure that the stellar 2014 growth is not a flash in the pan. We need to invest and export more, innovate, and build. It is disappointing that we have downgraded export growth for the next two years as a strong international trade performance is key if we are to steer away from a reliance on consumer spending. While business investment is forecast to grow strongly over the next three years, it will be growing from a low base. To sustain investment momentum into the future, the government and the Bank of England need to give businesses the confidence they need to invest by keeping official interest rates low for as long as possible. Any future rate rises must be gradual and modest.

Full report here

GBPUSD 1.6586 helped lower by EURGBP finding buyers again