Pound Ticks Higher as UK Economy Beats Expectations with 0.4% Growth in July

The British pound experienced a slight increase after the release of official data showing the UK economy grew 0.4% in July, exceeding forecasts. Economists had predicted zero growth for the month.

This performance pushed the year-on-year growth rate to 1.6%, surpassing the 1.2% expected by economists and marking the strongest annual reading since February 2025.

The services sector matched the headline figure with its own 0.4% monthly gain, while IT, computer programming, and artificial intelligence-related activities were key drivers of expansion.

Deutsche Bank's Sanjay Raja noted that the UK's growth story is gaining attention in global markets, but rising energy costs and potential downward revisions to future data remain concerns for policymakers.