Pound continues 'relentless' slide against euro
There was little respite for sterling yesterday as UK data confirmed the British economy grew by just 0.3pc, with household spending slowing and business investment flatlining.
Sterling moved above 92 pence to €1 on Wednesday and hovered around the same level yesterday with the weak economic data doing little to ease the concerns of investors spooked by the ongoing Brexit uncertainty. The Office National Statistics confirmed that the economy grew 0.3pc in the second quarter after 0.2pc in the first three months of the year - adding up to the slowest growth for any major advanced economy since the start of 2017.
The data showed negligible growth in household spending and flat business investment.
"The breakdown of the UK data was disappointing, with consumer spending and business investment readings of 0.1pc and 0.7pc respectively failing to reach market expectations or the projections from Bank of England in its latest inflation report," said Bank of Ireland's head of global customer group, John Moclair.
"While this weakness was offset by growth in net exports, it will be a concern for the authorities that the roughly 70pc of the economy represented by consumer spending and business investment are barely growing, and supports the recent decision of the Bank of England to prioritise growth prospects over short term inflation concerns."
It came as Moodys Investors Service warned that while the UK economy is expected to see moderate and stable growth in the third quarter, it faces challenges from weaker consumption and a stagnating housing market.
A separate report suggested the weak performance will continue.
The Confederation of British Industry said retail sales growth slowed in August at the fastest pace in more than a year.
Earlier this month Bank of England governor Mark Carney said Brexit worries were weighing on business investment and pay decisions, and that sterling's fall since the Brexit vote was to blame for above-target inflation.
Specialist bank Investec said the pound is continuing its relentless slide against the euro.