Published: Fri, 27 Mar 2009 12:30:50 +0100

Sterling Slides After Downbeat Outlook for UK GDP

(CEP News) - The pound sterling is relatively weaker after a slight downward revision to fourth quarter GDP, along with comments from the Bank of England's Chief Economist expecting more of the same in Q1.

UK fourth quarter GDP was revised to a 1.6% contraction despite expectations for no change to the preliminary 1.5% decline.

Meanwhile, Bank of England Chief Economist Spencer Dale has he expects Q1 GDP results to be similar to those of Q4, but he added that large amounts of uncertainty surround his forecasts.

UK Chancellor of the Exchequer Alistair Darling said that revamping the UK regulatory system should not hinder innovation or responsible risk-taking in financial services.

After government stress testing, a UK Financial Services Authority official said Barclays will likely not need additional capital.

All data taken at 7:26 a.m. EDT,.

GBP/USD down 1.25 cents to 1.4328

Euro/GBP down 0.08 pence to 0.9350

GBP/CAD down 0.77 cents to 1.7706

By Erik Kevin Franco, efranco@economicnews.ca, edited by Stephen Huebl, shuebl@economicnews.ca