GBP/USD Rebounds on UK GDP Surprise, But Inflation Risks Loom

The UK's GDP rose by 0.4% in July, surpassing expectations and boosting the pound against the US dollar.

However, the Bank of England (BoE) is unlikely to raise interest rates in September due to weak employment conditions.

A more hawkish policy path is being priced in by markets, with the one-year OIS rising faster than the three-month rate.

The BoE faces a dilemma between managing growth and tackling inflation risks driven by higher energy costs.