GBP/USD Steady After Stronger-Than-Expected UK GDP Growth
The Pound-Dollar exchange rate is steady after the UK's GDP growth data was stronger than expected. Despite this, Sterling remains under pressure and has not made significant headway against a broadly steady US Dollar.
The Office for National Statistics reported that the UK economy expanded by 0.4% during the second quarter. The quarterly increase matched consensus forecasts and represented a slowdown from 0.6% growth during the opening three months of 2026.
The more encouraging element came from the monthly figures, with GDP increasing 0.3% in June compared with expectations for no growth. Services provided the main support during June, recording a 0.4% increase as activity benefited from the temporary Gulf ceasefire, the start of the World Cup and favourable weather.
The US Dollar has resisted further selling pressure despite investors cutting expectations for another Federal Reserve interest-rate increase. US headline inflation slowed from 3.5% to 3.4% in July, while core inflation eased from 2.6% to 2.5%. Markets subsequently reduced the implied probability of a September Federal Reserve rate increase to around 40%, compared with 54% before the inflation release.