12 Feb

Britain experienced its largest economic contraction since 1709

February 12, 2021

by JustForex

The shares rally was paused on Thursday and declined on Friday morning. One of the reasons was the lack of progress in the Brexit negotiations. The country’s withdrawal from the EU was 6 weeks ago, but it hasn’t been possible to resolve a dispute regarding a trade with Northern Ireland so far. On Thursday, four-hour negotiations came to nothing again. The sterling declined together with Gilts.

Minister for the Cabinet Office Michael Gove and European Commission Vice-President Maros Sefcovic held a meeting in London, which their teams described as “frank but meaningful”. However, the key trade differences that have strained the UK-EU relationship over the past six weeks haven’t been resolved. The ministers promised to intensify their work with the common goal of finding functional solutions.

Since the Brexit transition period ended on December 31, tensions between the two sides have intensified on a number of issues, including the financial services trading, the supply of Covid-19 vaccines, and the goods flow between mainland Britain and Northern Ireland.

Meanwhile, the UK Office for National Statistics released data on economic growth in the fourth quarter. At the end of the year, GDP increased twice as much as expected. The preliminary estimate was 1%. For the whole year, the UK economy lost 9.9%, which is the worst metric since 1709.

Fourth-quarter results confirm the Bank of England’s estimation that growth will boost when a large-scale vaccination campaign begins. Central Bank Chief Economist Andy Haldane expects consumer spending to rise by £250 billion from savings accumulated by households during the lockdown.

Free Reports:

Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.





Sign Up for Our Stock Market Newsletter – Get updated on News, Charts & Rankings of Public Companies when you join our Stocks Newsletter




After the closure of trading floors in China, there is a correction across the entire spectrum of the market. Oil lost just over 2%. Treasury yield decreased to 1.50%. World stock indices are showing a tendency towards correction.

Main market quotes:

S&P 500 (F) 3,896.38 -15.62 (-0.40%)

Dow Jones 31,430.70 -7.10 (-0.02%)

DAX 13,945.45 -95.46 (-0.68%)

FTSE 100 6,497.85 -30.87 (-0.47%)

USD Index 90.602 +0.189 (+0.21%)

Important events:
  • – UK GDP (q/q) (q4) at 09:00 (GMT+2);
  • – UK Manufacturing Output (m/m) (Dec) at 09:00 (GMT+2);
  • – University of Michigan United States Consumer Sentiment (Feb) at 17:00 (GMT+2).

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


investmacro cot newsletter




Financial News Forex and Currency News