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British pound boosted by GDP growth, temporary ease in Brexit concerns

2019-09-09 16:03

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LONDON, Sept. 9 (Xinhua) -- Boosted by faster-than-expected growth in July, the British pound climbed strongly against the U.S. dollar on Monday to achieve its highest rate this month after being exposed to heightened tensions over Brexit.

The Office for National Statistics (ONS) revealed that the country's GDP rose by 0.3 percent in July, The growth was relatively large in the services sector following four consecutive months of flat growth.

The pound has been moving upward and was trading as high as 1.2381 against the U.S. dollar by noon.

"While parliament seems to be falling apart, the economy is holding up reasonably well. July's surprisingly strong rise in GDP suggests that it has not fallen into a recession,"said Paul Dales, chief UK economist at Capital Economics.

The currency dropped below 1.2 against the U.S. dollar last Tuesday on concerns about a no-deal Brexit and the prospect of a snap election, a rate that has been rare since 1985.

It rebounded later last week after the House of Commons passed a bill to block a no-deal Brexit and require the government to request from the EU a Brexit delay till the end of January next year.

After passage through the House of Lords, the bill is waiting for royal assent before it can become law.

Downing Street confirmed that the parliament will be prorogued Monday night after a vote on holding an early general election on Oct. 15.

"While parliament will face another motion calling for a general election today, the chances of it passing appear extremely slim," said Matthew Andrews, an analyst at currency broker TorFX. British Prime Minister Boris Johnson is in Dublin on Monday for the first time since taking office in July.

Johnson said there he wanted to get a deal and believed that a deal was still possible by the EU summit next month. A no-deal Brexit would be a failure that both the British and Irish governments would be responsible for, he said.

But Irish Prime Minister Leo Varadkar said there was no such thing as a clean break between Britain and the EU.
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