GBP/USD Bounces on Strong UK Data, But US Inflation Looms

The British pound rebounded against the US dollar after a strong showing in UK GDP and output figures, but its recovery may be short-lived as markets await US inflation data.

According to recent data from the Office for National Statistics (ONS), July's monthly GDP rose 0.4%, while manufacturing output increased 0.9% and services saw a 0.4% gain.

The figures are unlikely to prompt an immediate interest rate hike by the Bank of England, but they do suggest that parts of the economy remain resilient in the face of building inflation risks.

Markets are currently pricing a more hawkish policy path for the BoE further out, with traders betting on tighter monetary conditions later this year and into 2027.