Pound Sterling hits one-month high as UK GDP data beats estimates
The Pound Sterling (GBP) attracts bids against its major peers on Thursday on upbeat United Kingdom (UK) Gross Domestic Product (GDP) and factory data. The Office for National Statistics (ONS) reported that the economy grew by 0.3% in the second quarter of the year, stronger than expectations of 0.1%. In the first quarter of the year, GDP growth was 0.7%.
In June, the UK economy grew by 0.4% after contracting 0.1% in May, while it was expected to rise just by 0.1%.
Factory data has also come in stronger than projected. Month-on-month, Manufacturing and Industrial Production rose by 0.5% and 0.7% in June, respectively, after declining significantly in May.
Upbeat GDP and factory data show that the economy is holding up better than anticipated, a scenario that could allow the Bank of England (BoE) to avoid reducing interest rates aggressively and thus supportive for the Pound Sterling.
In the monetary policy meeting earlier this month, the BoE reduced interest rates by 25 basis points (bps) to 4.00% and retained its “gradual and careful” monetary expansion guidance. Still, it was a very tight decision as four of the nine BoE members voted to keep rates unchanged.
Source: FXstreet
