After a run of dismal numbers throughout December that made it look like the Bank of England would step in with some serious stimulus, the reluctance of almost half of its interest rate setters to cut rates even now gave a boost to the pound last week.
Even so, the cut to 3.75% did go ahead, with unemployment at its highest for over four years and inflation falling to 3.2%. This morning GDP was confirmed at just 0.1% for the third quarter. Moreover, the Office for National Statistics (ONS) revised down its previous growth estimate for Q2 from 0.3% to 0.2%.
However, there was good news too from the ONS this morning. Business investment in the UK rose by 1.5% in Q3, much better than expected and reflecting a rise in corporate spending. It takes annual business investment up to 2.7% compared to a prediction of just 0.7%.
On the commodity markets, gold and silver both hit record highs again this morning, as the markets look for safe havens away from the dollar with interest rate cuts likely in the US early next year.
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