The pound surged today to its highest value in a month against the euro and dollar as the UK economy shrugs off the threat of recession.
Markets reacted well to news from the Office for National Statistics that Gross Domestic Product grew by 0.3 per cent in July.
The ONS also reported that growth for the three months to July was flat.
This compares to the news last month that the UK’s economy had shrunk by 0.2 per cent amid worries about Brexit.
But last week the market recovered with news of legislation blocking a no-deal exit passing.
Today the pound reached $1.2360 and €1.1211, levels not seen since the end of July.
When the shrinking of the economy was announced last month, there was talk of a recession.
According to The Balance, a recession is “when the economy declines significantly for at least six months”.
The Growth of GDP was backed by the growth of the UK’s services industry.
But other areas like construction and manufacturing contracted.
Rob Kent-Smith, head of GDP at the ONS, said: “GDP growth was flat in the latest three months, with falls in construction and manufacturing.
"While the largest part of the economy, services sector, returned to growth in the month of July, the underlying picture shows services growth weakening through 2019.
“The trade deficit narrowed due to falling imports, particularly unspecified goods (including non-monetary gold), chemicals and road vehicles in the three months to July."
Melanie Baker, senior economist at Royal London Asset Management, said: “Mechanically the 0.3 per cent rise in July very much improves the chance of the UK avoiding a technical recession this quarter.
“However, combined with the picture coming from business surveys, the data still looks consistent with weak underlying growth in the UK economy as the next Brexit deadline approaches.”
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