Poor data from the UK sent the pound sharply down

The US dollar rose against most of the major currencies, with its biggest gain against the British pound. In fact, the weakness of the pounds was ubiquitous, following worse than expected economic data coming from the country.
The pound fell by nearly 1% against the dollar to 1.4110 after disappointing economic data.
Inflation in the UK slowed down more than expected in March to 1.25% in the month, from 2.7% in February. This has led investors to think that we will hardly see a recent rise in interest rates on the part of the British Central Bank.
Also, the results have prompted a number of experts to expect a slowdown in economic activity in the country that is soon expected to come out of the EU.
Late yesterday, the British pound traded at $1.4377, a new peak after the referendum. Even though, despite its decline today, the British pound is still trading substantially up against the US dollar in the last 12 months. More precisely - 11% up.

The growth of the UK economy accelerated

In the last quarter of 2016 the UK economy expanded at a good pace compared to the previous three months due to solid growth in British exports, but shrinking business investment, showed a final evaluation of official statistics ONS, analysts say.
Gross domestic product in the UK expanded during the period from October to December by 0.7% compared to the third quarter, when increased by 0.5%, confirming previous data on British statistics.
The acceleration of growth was mainly due to British exports, which grew on a quarterly basis by 4.6% against a previous forecast for an increase of 4.1%, after in the third quarter exports declined by 2.1%. Imports did drop by 1.0% after rising by 1.4% in the previous quarter and preliminary data showing reduction of imports late last year by 0.4%.
Meanwhile, business investment in the UK reduced by 0.9% after 0.4% growth in the third quarter, indicating that concerns about already launched Brexit may restrict investment in the future.
On an annual basis, however, the UK's GDP grew in the last quarter of 2016 to 1.9% compared to previous assessment for increase by 2%.
For the full year the British economy expanded by 1.8%, following growth of 2.2% in 2015, confirming preliminary assessment of the ONS.
In a separate study British statistics reported a slight reduction in the service sector in January by 0.1% compared to December 2016, when it was reported expansion of 0.2%. For the three months to the end of January, the services sector grew by 0.6% with expectations for expansion by 0.7% after an increase by 0.8% in the last quarter of last year.

British economy retains upward momentum (Part 2)

Inflationary pressure is strong in the industrial sector, where manufacturers are suffering from rising raw material costs, according to BCC price pressures is now the highest since the second quarter of 1997 onwards.

According to the survey, inflation has emerged as the biggest cause of concern for many companies. Companies from both industrial and the services sectors are under pressure mainly by rising raw material costs, which increases opportunity for profit and could weaken further investment.

Firms in the country have become slightly more optimistic about their prospects compared to the previous quarter, although their confidence in turnover and profits remained relatively low compared with levels in the last three years.

The latest quarterly survey by the British Chamber of Commerce covers more than 7,200 companies in the country and was conducted between November 7 and November 28, 2016.

British economy retains upward momentum (Part 1)

The British economy has maintained its upward momentum in the last months of 2016, but at the same time, inflationary pressure has increased with the robust pace of almost 20 years. This shows a survey of British Chamber of Commerce (BCC), released today and cited by Reuters.
British Chamber of Commerce said that sales and hiring improved slightly in the fourth quarter, which is another signal that Britain is likely outstripped growth in most of the developed economics past year. The latest quarterly survey, however, also indicates the presence of complications arising from the votes of the British referendum last June when Britons voted to leave the European Union.
According to BCC, a record number of manufacturers expecting price rises over the next three months. Most companies in the service plan to raise prices, and their number is the highest since the beginning of 2011 onwards.

Although British business reported a slight improvement in export sales in the fourth quarter, the Chamber of Commerce notes that there is still very little evidence that the weakness of the pound has provoked a boom in demand for British goods abroad.

The Bank of England brang the pound to life

On Thursday, on the foreign exchange market in the spotlight is the British pound. Today, after at their meeting, the Bank of England lowered the interest rate from 0.5% to 0.25%. This is the lowest value of the index over the past 320 years. Also, the central bank increased its asset purchase from 375 billion pounds to 435 billion pounds.
The bank's actions were expected. Mark Carney in his speeches after Brexit warned currency market players that the regulator will carry ultrasoft policy and it is likely to decrease the rate.
This decision was dictated by a desire to support the UK economy, improve goods turnover and increase the volume of industrial production. Not the least role in the decision of the Bank of England played the results of the referendum on exit of the UK from the EU structure. After the UK will be out of the EU, its economy may experience a certain drawdown, but this aspect should be soften.
The pair GBP/USD in the coming days will aim for 1,289, thus, the pound's downward trend will be confirmed in both medium and long term.