UK industrial output is down 0.7% m/m, worse than flat expected, and manufacturing production is down -0.4%, different from +0.1% predicted. Year over year, output is up only 0.9% against 1.7% predicted and manufacturing is down 1.2% against only -0.8% predicted.
GBP/USD is dipping under 1.45 and reaching new lows.Cable is at the lowest since 2010, with the low currently recorded at 1.4482.
The Bank of England convenes on Thursday to make its rate decision. The Bank is not expected to change its policy, but perhaps the single member voting for a hike will align with the majority. Manufacturing is only a small part of the economy and it has been sliding also in other parts of the world. I
n the US, many believe this sector is in recession and in China, every weak manufacturing PMI release is felt all over the world. Britain is not alone in this.
Further support can be found only at 1.42. 1.46 is resistance. The pound is also losing ground against other currencies. The pound also suffers from the gloomy mood in markets. In the recent dynamics, sterling is aligned with commodity currencies and not with the safe haven euro and yen.
