13th November 2025
Hi Simon
If you’re reporting on the market response to the UK’s Q3 GDP data, the following analysis may be useful.
Best wishes,
Jack
James Bentley, Director at Financial Markets Online, commented:
“Suddenly the chances of an interest rate cut before Christmas are on a par with the likelihood of mince pies and syrupy TV ads.
“The GDP data confirms that Britain's economic growth has all but ground to a halt. While the stagnation can be partly blamed on the punishing 28.6% drop in carmaking seen during the third quarter, the UK's economic weakness is widespread and entrenched.
“With unemployment surging and job vacancies sliding, the labour market reveals just how fragile business sentiment has become in the face of flatlining demand and pre-Budget anxiety.
“Last week the Bank of England said that, in its view, inflation has peaked. Despite narrowly voting to not cut the base rate immediately, the Bank’s Monetary Policy Committee left the door wide open to a December cut.
“Today’s GDP numbers give the Bank every reason to walk through that door next month. With inflationary fears dissipating, its priority will be kickstarting the UK’s moribund growth - and a December rate cut now looks all but assured.
“This rapid shift has sent sterling spiralling to its lowest level against the Euro in two and a half years, and the Pound’s losing streak is set to continue as institutional investors continue to dump sterling.
“The bond markets’ confidence in UK Plc has also taken a hit as rumours swirl of a Cabinet plot to oust the Prime Minister after this month’s make or break Budget. UK gilt yields have notched up as a result, increasing the Government’s borrowing costs.
“While the FTSE 100 closed at a record high on Wednesday, Britain’s economy is sleepwalking.”