Morning Forex Fundamental: GBP

Morning Forex Fundamental: GBP

It is quite early in the flow of first-quarter data, but the data so far suggest that first-quarter growth may well be negative, or at best flat' - Michael Saunders, an economist at Citigroup Inc.

Britain is facing risks of falling into a triple dip recession, as new figures on the U.K.'s manufacturing output came worse than expected. A report by the Office for National Statistics showed that a gauge of manufacturing output plunged by 1.5% in January, missing expectations for a 0.1% increase. At the same time, a wider measure of industrial production, which includes mining, quarrying, electricity, gas and water supply, tumbled by 1.2% in January from a month earlier. A continuous slump in the Eurozone, as well as lacklustre domestic demand is adding to concerns that the U.K. economy will fall into its third recession in five years. Nation's gross domestic product is expected to shrink by 0.1% in the first three months of 2013.

'A dire set of U.K. data,' said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. It leaves a 'decline in first-quarter gross domestic product looking more likely than not. Sustainable recovery and macroeconomic rebalancing feel as distant as ever.'

'It is quite early in the flow of first-quarter data, but the data so far suggest that first-quarter growth may well be negative, or at best flat,' said Michael Saunders, an economist at Citigroup Inc. in London.