Pound Surges as UK Economy Booms on Revised GDP Data and EU Rapprochement

The pound has strengthened against all other G10 currencies, reaching its highest point in a month. The EURGBP pair broke below 0.856, a level not seen since late August.

This momentum was driven by an upward revision of the UK's second-quarter GDP data, which showed growth at 0.5% quarter-on-quarter, beating preliminary estimates of 0.4%. This strong start to the year is expected to continue into the third quarter.

Prime Minister Andy Burnham has pledged to maintain fiscal discipline and announced plans for future relations with the EU, including a customs union and rejoining the single market entirely. However, the gilts market reacted with subdued enthusiasm, awaiting the Autumn Budget on October 28th.