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Jan 11 - 08:55 AM

GBP/USD - COMMENT-UK Double-Dip Recession Is Baked Into Sterling's Cake

By Rob Howard  —  Jan 11 - 07:14 AM

Jan 11 (Reuters) - Although 2021 is just a few days old, Britain's economy will undoubtedly contract this quarter -- courtesy of Britain's third lockdown and the steeper the contraction, the worse for sterling.

The expected contraction will also leave Britain in its first double-dip recession since 1975.
A Reuters poll says Friday's ONS data will show the UK economy shrank by 5.7% in November (when Britain was locked down for a second time), following meagre growth of 0.4% in October.

The pound fell to its lowest against the U.S. dollar since Dec.
29 on Monday, 1.3473, as Britain's chief medical officer, Chris Whitty, said Britain is facing the worst weeks of the COVID-19 pandemic. nL8N2JM1BA

British finance minister Rishi Sunak will update parliament about the economic outlook at 1530GMT. nL8N2JM26YnL1N2JL0IE

Friday's CFTC data showed IMM speculators maintained a small net GBP long position as 2021 got underway. nL1N2JM0CQ

Related comments: nL1N2JG0LPnL1N2JJ0LMnL1N2JI0QJ

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