Pound slumps after disappointing UK economic data

 
Oscar Lopez
(FILES) A picture taken 17 April 2007 in...
The pound has dropped sharply against the greenback. (Source: Getty)

The pound saw a sharp decline this morning after figures from the Office for National Statistics (ONS) showed the UK economy continuing to slow.

Sterling dropped 0.39 per cent to $1.3353 against the dollar, but the UK currency remains above the five-month low of $1.3249 seen at the end of May.

The ONS figures showed that, on a quarterly basis, construction in the UK fell by 3.4 per cent in April 2018, the biggest fall since August 2012.

Read more: UK construction sees minor lift as trade deficit spikes

Meanwhile, manufacturing output in Britain saw the sharpest drop in almost six years in April, while the country’s trade deficit has spiked to £5.3bn in April from £3.2bn in March

David Slater, director of trade at KPMG UK said: “Overall the last 12 months have been a buoyant time for UK exporters.

“However, in the final run up to Brexit, with a stronger pound and uncertainty around the UK’s future trading relationship now sapping business confidence, export volumes in both goods and services fell in the first quarter of this year.

“Warnings about using UK suppliers issued by the European Commission earlier this year won’t have helped confidence in British exports either.”

However, despite the disappointing economic data, experts believe sterling is due for a recovery.

Read more: Pound set to recover from post-Brexit losses by March 2019

According to a recent Reuters poll of foreign exchange experts, sterling is likely to gain over the next few months, however it is unlikely to reach the $1.43 height it traded at earlier this year.

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