Release Explanation: This report is the unofficial estimate of U.K. GDP that comes out one month before the official release. It is calculated by using statistical projection techniques; the NIESR estimates are highly respected and can influence monetary policy.
The meaning and consequences of the report are very close to those for official GDP numbers. A high rate of growth signals a heightened level of economic activity. Such expansion also raises concerns about inflationary pressure, which may prompt monetary authorities to increase interest rates. Accordingly, high NIESR GDP estimates are generally bullish for the pound, while negative readings are bearish.
Trade Desk Thoughts: The National Institute for Economic and Social Research (NIESR) has stated that the U.K. economy contracted 1.8 percent in the three months to February. This follows output falling by 1.7 percent in the three months to January. The NIESR concludes that additional bank credit may make it easier for companies and businesses to cycle through their stock which will slow the rate of contraction.
Forex Technical Reaction: The pound has managed to break above and find support on the neutral pivot point at 1.3785.