The UK economy grew slightly in Q1 of 2011, as expected, recovering from a contraction in the last quarter of 2010. The data shows that Britain’s economy has not shown significant growth since last September making it more likely the Bank of England will hold rates for the time being.
Q1 GDP Preliminary q/q rose to 0.5%, slightly above forecast for 0.4% and up from -0.5% in Q4. Preliminary GDP y/y was up to 1.8% from 1.5% in Q4 2010, as expected.
GBP/USD jumped to a day’s high of 1.6545 after the data release, while EUR/GBP dropped to a day’s low of 0.8873 from 0.8922.
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