02/05/2017 - Slow Growth Figures For UK Growth
Friday morning didn't start well for the Pound after figures revealed the UK economy grew by just 0.3% at the start of the year, the slowest growth rate since the first three months of 2016. The Office for National Statistics said that the slower pace in Q1 was due mainly to the service sector, which sank to 0.3% growth against 0.8% at the end of 2016. Analysts were expecting growth to slow as consumers reigned back spending in the face of rising inflation, forecasting a higher figure of 0.4%.
Over the May bank holiday weekend Theresa May was fighting accusations of a botched and humiliating start to the Brexit negotiations as claims emerged that the prime minister was told by the European commission’s president, Jean-Claude Juncker, that there may not be any point in her even turning up to the first day of talks.
Theresa May was on her election campaign and sought to dismiss Juncker's comments as “Brussels gossip” rubbishing accounts of a dinner with the EU chief. It is claimed she was warned negotiations may not even get going unless she accepted that the bloc would not talk about a future trade deal until the British government came to an agreement on its estimated €60bn divorce bill and citizens rights.
According to multiple accounts of the dinner May's insistence that talks about the future relationship should start early and that Britain did not owe any money to the EU under the current treaties were met with disbelief from her guests from Brussels. Juncker turned to Michel Barnier [the EU’s chief negotiator], then to Ms May again, and said that contrary to his expectations the next 23 months might be extremely calm in terms of negotiation. He made clear there was no point in having even a first meeting unless the UK accepted the wording of the treaty and the political reality of a united EU27.
Trump's ambitions to significantly boost growth took a knock after data showed the U.S. economy grew at its weakest pace in three years in the first quarter as consumer spending almost stalled, but a surge in business investment and wage growth suggested activity would regain momentum as the year progresses.
Gross domestic product increased at a 0.7 percent annual rate and analysts were keen to to paint a true picture of the economy's health. Wage growth in the first quarter was the fastest in 10 years as the labor market nears full employment and business investment on equipment was the strongest since the third quarter of 2015.
09:30 - GBP - Manufacturing PMI is forecast to decrease to 54.