Pound Gains Strength as UK Economy Beats Estimates

The British pound is gaining strength against other major currencies, with the EURGBP pair reaching its lowest level since late August. According to revised data from the UK's Office for National Statistics (ONS), the country's economy grew by 0.5% in the second quarter, beating initial estimates.

This uptick in economic growth could prompt the Bank of England to raise interest rates if high energy prices continue to drive inflation. Meanwhile, Prime Minister Andy Burnham has pledged to maintain strict fiscal rules and hinted at rejoining the EU entirely, which could have significant implications for sterling trades.

The gilts market reacted mildly to these announcements, but the true test of the government's fiscal credibility will come with the Autumn Budget on October 28. Until then, investors will be watching for signs that the UK's economic momentum is being sustained.