Sterling Recovers from 2-Month Low

After expanding by 0.20% during the first three months of the year, the UK Office for National Statistics confirmed Thursday that the economy experienced second quarter expansion of 0.30% in its second estimate of gross domestic product for the period.

Meanwhile, a separate report published by the Confederation of British Industry showed that retail sales growth slowed in August by the fastest rate in over a year. The UK had last year surprised most economists by managing to grow in the six months following the June vote to leave the European Union, with increased activity largely the function of strong consumer spending.

However, Thursday’s numbers showed household spending is flattening, reigniting investor concerns about the economic outlook.

GBPUSD touched a two-month low of 1.2770 on Thursday before rebounding back above 1.2800 overnight.

Core consumer prices in Japan edged 0.50% higher from a year ago, marking a seventh consecutive month of gains as the economy makes steady yet slow progress towards meeting the Bank of Japan’s 2.00% inflation target.

The July increase was primarily driven by higher fuel bills, with wage growth continuing to remain subdued, discouraging consumers from lifting their spending.

Core consumer prices in Tokyo, released a month ahead of the nationwide figures, rose 0.40% in August on a yearly basis, just shy of a 0.30% gain forecast by a Reuters poll. The Japanese economy expanded at its fastest pace in over two years during the second quarter. Nevertheless, weak price and wage growth has raised investor concerns over whether the second quarter bounce can be sustained.

AUDJPY was last seen around the 86.550-mark.