The Great Britain pound declined versus the euro after the report that the U.K. economy’s growth was lower by half compared to the pace of the expansion forecasted by the experts in the first three months of this year.
The gross domestic product in the U.K. rose 0.2 percent in the first quarter of 2010, while the average estimate was 0.4 percent. The concern for the result of the forthcoming election and the threat of the possible budget shortage have negative impact on the sterling.
The economists say that the strength of the pound depends on the outcome of the election as the strong government will diminish fear of the budget deficit. Until the election next month the U.K. currency faces too much uncertainty in terms of growth and the fiscal outlook to support its performance.
EUR/GBP closed at 0.8695 after opening at 0.8643. GBP/USD closed at 1.5377, at the same level it opened.
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