UK production figures send sterling higher

The pound is up 0.3% versus the US dollar after the UK released strong manufacturing and industrial production reports.

GBP/USD is trading at $1.6090, up 0.3% on the day, following manufacturing production numbers that were in line with analysts’ expectations together with industrial production figures above the market consensus. In September, manufacturing production increased by 1.2% in comparison with August. Meanwhile, industrial production rose by 0.9%, although analysts were expecting an increase of just 0.7%.

The industrial sector accounts for about one sixth of the British economy, and the announcement initially pushed the pound above the $1.61 level. But some early profit-taking subsequently sent sterling lower.

The increase in output comes a day ahead of the Bank of England (BoE) meeting. Economists are expecting no change to the interest rate or the £375 billion bond-buying scheme, but in light of today’s positive economic data we could expect a favourable outlook from the central bank. The governor of the BoE, Mark Carney, has previously suggested that interest rates could remain low for approximately three years. If Mr Carney states that the UK economy is performing better than his estimation, we could see sterling rally.

Spot FX GBP/USD chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by analysts

Find out more about