Investors apprehended the latest round of GDP data from the UK for the second quarter of 2025 with hopefulness, contributing to extension of the Sterling into 5-week highs.
The British economy grew by three tenths of a percent (0.3%) in the second quarter, above market expectations for a mere 0.1% rise, but results were below last quarters’ levels primarily due to the Chancelor Reeve’s controversial stamp duty changes and the announcement of new US tariffs from President Trump across the pond.
All three main sectors contributed to the growth, with services output providing the largest boost with information technology’s outperformance. On the production side, manufacturing grew moderately and finally construction activity continued its recovery process.
The GDP figures are not bad enough to warrant swift cuts by the BoE analysts say, therefore markets now await the MPC to sit the next meeting out and keep rates steady, awaiting for employment and inflation data to roll in.
The last labour market update showcased that only 8k jobs were created in July, but at the end of the day the result was significantly above the -20k economists forecasted, indicating that the UK employment market has some fighting left in it and that it is currently withstanding the Labour government’s £26 billion tax hike better than expected.
Technical Analysis
GBPUSD Chart – The British Pound climbs to 5-week highs after Q2 GDP beat
Resistance: 1.3600 (R1), 1.3800 (R2), 1.4000 (R3)
Support: 1.3400 (S1), 1.3160 (S2), 1.3000 (S3)
