GBP Weaker As OECD Forecasts UK Growth Disappointment
OECD Raises UK Growth Forecasts... Slightly
The latest set of forecasts from the OECD makes pretty dim reading for the UK. The economy is set to suffer the second-worst performance of the G7 this year, underperformed only by Germany which already fell into recession earlier in the year. Overall, the UK is pegged to record growth of a paltry 0.3% in 2023, although this is a stark improvement from the 0.2% decline forecast last time around. Looking ahead, growth is set to improve next year, with the OECD forecasting an overall GDP increase of 1% though unemployment is set to rise to 4.5%.
UK Hurt by Weak Consumption
While UK growth is low among G7 members, it is even lower when looking at the overall G20 picture where growth is set to average 2.8% this year and 2.9% next year. Commenting on the UK, the OECD noted that the economy should be helped by government investment. However, weak household income growth is set to act as a drag on consumption despite inflation falling. Additionally, monetary tightening is set to constrain both consumer and business spending.
Technical Views
GBPUSD
For now, the pair continues to hold around the 1.2437 level following the correction lower from the 1.2659 highs. With price remaining in the upper portion of the bull channel, the focus for now is on a further move higher eventually while 1.2270 holds as support.
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