By CountingPips.com
The British pound today fell sharply in forex trading as the U.K. economy has continued to be stuck in its longest economic slump since 1955. Preliminary third quarter results for the U.K. gross domestic product showed that the U.K. economy fell by 0.4 percent according to the Office for National Statistics. This marked the sixth straight quarter of decline and the longest recession 
since 1955 when official economic records began. The GDP decline surprised economic forecasters that were expecting a 0.2 percent rise for the July to September quarter. The second quarter GDP had declined by 0.6 percent while the first quarter fell by 2.5 percent.
On an annual basis, GDP fell by 5.2 percent in the third quarter from the 2008 third quarter level following a 5.5 percent decrease in the second quarter. Contributing to the decrease was a 0.7 percent decline in the production industries and a 0.2 percent fall in the service industries. Manufacturing fell by 0.2 percent for the quarter while construction dropped 1.1 percent and mining & quarrying decreased 3.5 per cent.
The GDP data sent the British currency plunging against the other major currencies today after the pound had a gaining week last week on speculation that the Bank of England may discontinue its quantitative easing program. The news today has pushed speculation back to the other side as the BOE may need to extend the program to help its struggling economy.
The pound has declined by over 300 pips today against the US dollar while also falling by more than 200 pips against the Swiss franc and Canadian dollar. The euro has advanced versus its currency rival by over 150 pips while the Japanese yen has jumped by over 180 pips against the British currency.
GBP/USD Chart – The British Pound Sterling falling against the US Dollar in forex trading after the UK’s 3rd quarter GDP data came in lower than expected. The GBP/USD trades right around its 200-hour moving average (black) after falling more than 300 pips today.
