Growth smashes expectations and Nissan is investing here, but the pound still marches lower

 
Jake Cordell
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Pound sterling
Sterling has been squeezed (Source: Getty)

Expectation-busting growth figures, a new commitment to build cars in the UK, and diminishing chances of an interest rate cut this year weren't enough to stop the pound falling into familiar patterns today.

Sterling suffered its customary afternoon sell-off yet again as the currency lost 0.6 per cent against the dollar, falling below $1.22 in afternoon trading.

It was a similar story against the euro, where sterling was off by 0.7 per cent at €1.1152.

All of that came despite some remarkably robust GDP numbers which showed the UK economy grew by 0.5 per cent in the first three months after Brexit. That was far ahead of the 0.3 per cent which economists pencilled in yesterday and out-of-sight compared to the flat-lining the Bank of England, among others, expected back in the weeks after the exit vote.

Read more: Did sterling save the post-referendum economy?

However, it appears even some decent fundamentals can't support the pound for too long these days, after it spent a fleeting two-and-a-half hours in positive territory after the numbers came out .

Typically, strong growth combined with expectations of high inflation should trigger central banks to adopt a tighter stance than they were previously considering and offer some strength to the currency. However, in Brexit Britain it's that final link of the chain which appears to be broken.

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