Sterling depreciates as ONS reveals disappointing flash estimate for Q4

<p>Sterling has lost ground after the ONS revealed its flash estimate for the fourth quarter,</p>

Sterling has lost ground in forex trading this morning (January 25th), after official figures revealed the UK economy contracted in the final three months of 2012.

According to a flash estimate from the Office for National Statistics (ONS), the UK experienced a 0.3 per cent shrinkage in the fourth quarter.

This data – which is compiled using around 14 per cent of the overall reports necessary for the ONS to calculate its final figure for the period – did not come as a surprise to analysts. But as there are at least two further revisions due from the statistics bureau, this 0.3 per cent drop could still go up or down.

A Treasury spokesman commented: "It confirms what we already knew – that Britain, like many European countries, still faces a very difficult economic situation."

At 10:50 GMT, the pound fell by 0.4 per cent against the euro to €1.175, while it lost marginal ground versus the dollar to $1.577.

Learn about the pound and forex trading at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.