| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | United Kingdom | GDP m/m | December | 0.2% | -0.2% | -0.1% |
| 07:00 | United Kingdom | Business Investment, q/q | Quarter IV | -2.8% | -0.1% | 1.5% |
| 07:00 | United Kingdom | Business Investment, y/y | Quarter IV | 2.6% | 1.1% | 3.7% |
| 07:00 | United Kingdom | GDP, y/y | Quarter IV | 0.2% | 0.1% | -0.2% |
| 07:00 | United Kingdom | GDP, q/q | Quarter IV | -0.1% | -0.1% | -0.3% |
| 10:00 | Eurozone | Trade balance unadjusted | December | 20.3 | 21.5 | 16.8 |
GBP declined against other major currencies in the European session on Thursday as investors responded to weaker-than-feared UK GDP data for the fourth quarter of 2023.
The Office for National Statistics (ONS) reported this morning that its preliminary estimates showed the UK’s economy contracted 0.3% QoQ in the final quarter of 2023, following a 0.1% shrink in the previous quarter. Thus, the British economy entered a technical recession in the latter half of 2023, defined as two consecutive quarters of negative economic growth. Economists had widely expected to see a recession but predicted a smaller decline of 0.1% QoQ for the fourth quarter.
For 2023 as a whole, the UK’s economy grew 0.1% YoY. This represented the slowest annual increase since 2009, excluding the first year of the COVID-19 pandemic.
The weaker-than-anticipated GDP data prompted markets to boost bets on the scope of interest rate cuts by the Bank of England this year. According to Bloomberg, markets are now fully pricing three 25-basis-point reductions and a 10% probability of the fourth move, while the first cut is seen by August.