UK’s Office for National Statistics posts no growth in the economy in its monthly report for January

The UK’s economy had previously shown signs of recovery following PM Johnson’s victory in the general election on December 12^th. The Office for National Statistics, however, released its monthly GDP (gross domestic product) report on Wednesday that announced the UK’s economy to have flat-lined in January. As per the experts, the official data currently doesn’t reflect the potential effect of Coronavirus on the economy.

Earlier on Wednesday, the Bank of England announced an emergency rate cut and a range of other measures directed at promoting economic growth in the UK amidst the Coronavirus emergency. Hours after the rate cut, the Office for National Statistics revealed January’s economic growth at 0.0% in the UK.

Economists Were Expecting A 0.2% Economic Growth In The UK In January

Economists were expecting a 0.2% growth in the UK’s GDP in January. In December, the UK’s economic growth was noted at a much higher 0.3%. The data further highlighted the GDP to also have remained flatlined in the past 3 months versus a 0.1% growth that economists had forecast in this period.

January also marked the third consecutive month that the GDP’s 3-month measure in the UK showed no signs of growth. Such a streak in the UK was last seen in 2009 during the global financial crisis.

The Office for National Statistics also released its monthly report on manufacturing production on Wednesday. As per the economic data, manufacturing production grew at a pace of 0.2% in January that came in line with what the economists had forecast. Manufacturing production in December, however, was recorded at a slightly higher 0.3% in the UK.

Wednesday’s data also showed a 0.6% improvement in the UK’s gross domestic product in January as compared to the same month last year. In December, however, the UK’s GDP was seen around 1.2% higher as compared to the reading for December 2018.

Response In The Forex Market

In the services sector, the data suggested a 0.1% growth in January as compared to December.

Amidst major economic news, GBP/USD is practicing significantly volatility in the forex market. The pair first dropped to 1.2827 following the emergency rate cut by the central bank, only to recover back to a daily high of 1.2975. Following the monthly GDP report, Cable dropped back to around 1.29 level. At the time of writing, it has recovered again to 1.2940.

As per the technical analysts, 1.30 region continues to pose a major resistance for the GBP/USD currency pair.