GBP/USD Rises on UK Data Amid Dovish Fed Remarks

The GBP/USD pair is rising modestly on Wednesday, but remains close to its three-month low after falling more than 2% across September. The move higher comes after stronger-than-expected UK data, which saw GDP growth upgraded to 0.5% in the three months to June, beating the initial estimate of 0.4%. This follows growth of 0.6% in Q1.

The improved data is a boost for the Labour Party as it holds its annual conference in Liverpool. However, despite solid GDP growth in Q1 and Q2, the outlook for the second half of the year is darkening, with pressures expected to build on businesses and households. Growth is expected to slow to 0.2% in Q3 and Q4 amid a fresh spike in living costs.

The U.S. dollar is pulling back from its two-month high as Treasury yields retreat. The Fed's decision to raise borrowing costs by the end of the year is still priced in, but recent dovish remarks from New York Fed President John Williams have sparked speculation about a potential delay.