Sterling depreciates as ONS reveals disappointing flash estimate for Q4

Sterling has lost ground in forex trading this morning (January 25th), after official figures revealed the UK economy contracted in the final three months of 2012.

According to a flash estimate from the Office for National Statistics (ONS), the UK experienced a 0.3 per cent shrinkage in the fourth quarter.

This data – which is compiled using around 14 per cent of the overall reports necessary for the ONS to calculate its final figure for the period – did not come as a surprise to analysts. But as there are at least two further revisions due from the statistics bureau, this 0.3 per cent drop could still go up or down.

A Treasury spokesman commented: "It confirms what we already knew – that Britain, like many European countries, still faces a very difficult economic situation."

At 10:50 GMT, the pound fell by 0.4 per cent against the euro to €1.175, while it lost marginal ground versus the dollar to $1.577.

Learn about the pound and forex trading at City Index.

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