UK Data “Hotter,” Pound Lifts
The pound sterling strengthened slightly on Thursday after the UK released more solid-than-expected economic activity data.
The Office for National Statistics (ONS) reported that monthly GDP rose 0.3% in November, beating market estimates of 0.1%. This figure also marked a recovery after the economy contracted 0.1% in September and October, following a stagnation in August.
This stronger data tends to dampen expectations of aggressive easing from the Bank of England (BoE). Although the BoE emphasized at its December meeting that its policy stance remains toward gradual interest rate cuts, improving growth data has narrowed the scope for a dovish stance.
A similar signal came from BoE official Alan Taylor, who on Wednesday said that monetary policy could return to neutral more quickly, with inflation around the target projected to stabilize from mid-2026.
Not only GDP, but the manufacturing sector also provided a boost. Monthly manufacturing production surged 2.1%—well above the 0.5% forecast and up from October. Meanwhile, industrial production rose 1.1%, beating the 0.1% estimate, although slightly slower than the previous month's figure. On an annual basis, both manufacturing and industrial production recorded stronger increases than market expectations.
Source: Newsmaker.id
