Morning Forex Fundamental: GBP

Morning Forex Fundamental: GBP

'The outlook for the remainder of 2012 remains bleak' - European Commission

U.K. depression till 2014

Impact Medium

The U.K. economy is expected to remain in a period of depression till 2014, as subdued spending and trade will slow down the economic recovery, the European Commission said Wednesday. Economy is likely to expand only 0.9 per cent in 2013, after a 0.3% drop in this year, compared to a previous estimate of 0.5 per cent in 2012 and 1.7 per cent in 2013. In the meanwhile, the economy continued growing in the quarter to October by adding 0.5%, however, slower than in the quarter to September, when the economy grew by 1.0%.

'The outlook for the remainder of 2012 remains bleak,' the European Commission said. 'It is increasingly unlikely that net trade will give a positive contribution to growth this year and it will remain subdued next year.'

'The total number in employment has already regained its pre-recession level,' said Niesr economist Simon Kirby. 'But the population has continued to grow in the meantime, and that means the employment rate is still below peak.'

The FTSE 100 Index turned lower 1.58 per cent to 5,791.63. The broader FTSE All-Share Index fell 1.48 per cent to 3,028.97