Investing.com - The pound dipped against the dollar on Thursday despite data on third quarter growth indicating that the U.K. economy shrugged off the immediate shock of the June 23 Brexit referendum.
GBP/USD initially touched highs of 1.2271 before easing back to trade at 1.2222.
U.K. gross domestic product grew by 0.5% in the three months to September, preliminary figures released by the Office for National Statistics showed, slowing from growth of 0.7% in the second quarter, but above forecasts for growth of 0.3%.
The economy grew by 2.3% on a year-over-year basis, also above the forecast for growth of 2.1%.
"There is little evidence of a pronounced effect in the immediate aftermath of the vote," ONS chief economist Joe Grice said.
Britain’s service sector, which makes up three quarters of the economy, expanded by 0.8% in the third quarter, but activity in other sectors contracted.
Construction shrank by 1.4%, agriculture contracted by 0.7% and industrial production shrank by 0.4%.
Today’s report is the first look at how the economy is responding to uncertainty created by Brexit.
The Bank of England had warned as recently as last month that the data would probably show growth of just 0.2% in the third quarter.
The central bank is to meet next week to decide whether to cut interest rates further in order to support the economy.
But BoE Governor Mark Carney said Tuesday the bank is concerned that the sharp fall in the pound could push up inflation, comments seen as indicating that rates will remain on hold.
U.K. Chancellor Philip Hammond welcomed the report, saying the U.K. economy is resilient, and “well-placed” to deal with the challenges and opportunities created by Brexit.
Sterling was also weaker against the euro, with EUR/GBP rising 0.21% to 0.8926.