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Sterling drops sharply

Result? The pound spiralled south to support at 1.6000. 

All eyes were on this Fridays GDP numbers in the UK with expectation for a -0.2 number. However, in actual fact, the number showed a much deeper contraction of -0.5! This led to frantic selling of the pound and lead it to 1.5200 against the dollar and 1.2100 to the euro from 1.2580! 

So what now? 

Well this data suggests that we are certainly in a recession and one that will be quite nasty. An interest cut will only devalue the pound further.

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