What’s been happening? The pound slipped lower versus the euro yesterday, whilst edging up against the US dollar. After Wednesday’s dire warnings about the likely stagnation, or continued decline, in UK wage growth over the coming 12 months, yesterday’s data provided a welcome boost for the UK economic outlook. Data from the Confederation of British industry (CBI) revealed a sharp uptick in output across all sectors of the economy. Surveys of over 600 players across the manufacturing, construction, and services industry revealed a net balance of +19% reporting that output had increased in the three months to December; a sharp uptick on the +6% reported in the three months to November and the fastest rise in two years. Meanwhile, weakness in the US dollar was able to support the euro, despite a disappointing economic bulletin from the European Central Bank (ECB). The latest bulletin continue to uphold the bank’s optimism regarding the overall economic outlook, with the latest growth forecasts revised significantly higher. However, projections for inflation remain gloomy, even if the overall prediction is for price growth to accelerate eventually. While GBP/EUR exchange rates struggled around opening levels for much of the day, the release of the US advance goods trade balance for November weakened the US dollar and allowed the euro to advance. The trade deficit unexpectedly widened to almost -US$70 billion, while initial and continuing jobless claims figures were worse than expected. | 
