Pound Jumps After U.K. GDP Beats Forecast

By Sara SjolinMarketsMarketWatch Pulse

The pound erased an earlier loss and moved firmly higher on Thursday after data showed the U.K. economy held up stronger than expected in the period following the country's Brexit vote. Sterling traded at $1.2263, up from $1.2240 ahead of the data and higher than the $1.2246 recorded late Wednesday in New York. The turnaround came after the Office for National Statistics said gross domestic product expanded 0.5% in the third quarter, outpacing forecasts of 0.3%. The data cover the first full quarter after the U.K.'s vote in June to leave the European Union, which economists and the Bank of England had warned would significantly hamper growth. "Although the macroeconomic data suggest that the Brexit risks have not been realized yet, it may be too early to drive conclusions. Businesses in the U.K. continue operating under a heavy cloud of uncertainty," said Ipek Ozkardeskaya, senior market analyst at London Capital Group, in a note.

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