BCC Forecast for UK Economic Performance Holds Back Pound Sterling (GBP) Exchange Rates

Modified: Tuesday, 13 September 2016 12:02 BST - Written by John Cameron

STORY LINK BCC Forecast for UK Economic Performance Holds Back Pound Sterling (GBP) Exchange Rates

Pound Sterling (GBP) Exchange Rate News and Forecast

Pound Sterling (currency : GBP) exchange rates performed creditably yesterday in spite of the weekend release of a decidedly downbeat assessment of the UK economy from the British Chambers of Commerce (BCC). The GBP/EUR and GBP/USD exchange rates remained sturdy in spite of cut growth projections. The headline-grabbing element of the report from the leading domestic business body saw it slash its UK Gross Domestic Product estimate for next year from a previous 2.3% to a relatively lowly 1.3%. The BCC noted in its accompanying report that,

‘Although individual businesses continue to report strong trading conditions, the overall picture suggests a sharp slowdown in UK growth lies ahead.’

2016 UK Growth Forecasts Trimmed Post Brexit

However, placing a more positive spin on the missive, some analysts pointed out that the BCC only trimmed its 2016 GDP growth forecast from a pre-Brexit 2.2% to 1.8%. Equally encouraging was the BCC’s forecast that the UK economy will not enter recession during the immediate aftermath of the Brexit vote.

Commodity Driven Currencies, Canadian Dollar (CAD) Norwegian Krone (NOK) Exchange Rates Fluctuate

Elsewhere, there was more bad news for the petro-currencies during yesterday’s afternoon session with the confirmation from the Organization of the Petroleum Exporting Countries (OPEC) that it forecast an increase in output levels from non-OPEC oil producing nations next year. The prediction that the combined levels of production from Norway, the UK and Kazakhstan, (amongst others), will be higher than expected threatens to send the price of a barrel of Crude Oil lower via the laws of Supply and Demand. The development piles the pressure on currencies including, but not limited to, the Norwegian Krone (currency : NOK), Canadian Dollar (currency : CAD) and the Saudi Riyal (currency : SAR).

Pound Sterling (GBP) Exchange Rates Projected to React to UK CPI Data

Elsewhere, Pound Sterling (currency : GBP) exchange rates will be afforded further direction later this morning with the publication of August’s domestic inflation data. With the latest Bank of England (BoE) monetary policy announcement looming large on Thursday, the price rise figures will be closely-monitored; an increase to 0.7% for the headline year-on-year Consumer Price Index figure is anticipated – anything less than this and the Pound will give up further ground against the other sixteen most actively-traded global currencies.

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TAGS: Currency Predictions Daily Currency Updates Poun Forecasts