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.