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Q/Q GDP in line, Dec services weak. No market reaction

  • UK GDP surprises to the downside for December but still comes in line for the Q/Q print at +0.01% (recall the BOE projected +0.1%Q/Q).
  • Very little market reaction - this isn't going to cause the BOE to not hike in March if there is strong inflation / labour market data. But it's also not added to the impetus to hike either.
  • Looking more into the data, it was December services that were the big disappointment. The ONS notes that "the largest contributions to this fall came from human health activities, education, arts, entertainment and recreation activities, and transport and storage."

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