The data was in line with expectation and reflected a slowdown in growth due to political doubt
The pound was little changed by the data, last trading at $1.2924, holding below the $1.30 benchmark hit nearly two weeks ago. Versus the euro, sterling was down around 0.1% at 86.39 pence.
“The data is irrelevant compared to the political election campaign we’ve got under way,” said Jordan Rochester, FX strategist at Nomura, who noted that weaker-than-expected Spanish PMI data on Monday weakened the euro, which strengthened the dollar, and thus limited sterling.
With just over five weeks until the UK heads to the polls on Dec. 12, the Conservative party is leading in the polls and the risk of a “no-deal” Brexit is considered to have been reduced.A spokesman for Johnson said that the transition period after Britain leaves the EU would not be extended beyond Dec. 31, 2020.
The Brexit Party’s leader Nigel Farage said on Sunday that he would not stand in the election, choosing instead to campaign against Johnson’s EU divorce deal.
Sterling-dollar implied volatility gauges with a one-month maturity, which fell in October, have started to rise again.“It’s too early to say who’s going to win and, given that uncertainty, foreign investors will hold back from being overweight UK assets,” Rochester said, suggesting that polling was not a reliable indicator as around a fifth of UK voters would not have decided who to vote for yet.