Sterling Surges Against Euro and Dollar as UK Growth Surpasses Expectations

The Pound Sterling rose against both the Euro and the Dollar in response to stronger-than-expected UK growth in July, according to data released by the ONS.

With a 0.4% monthly expansion following June's 0.3% increase, the economy comfortably beat expectations of no growth.

Lloyds Bank calculates that even if output remains unchanged in August and September, third-quarter growth would reach 0.6%, well above the Bank of England's 0.1% projection cited by the bank.

However, ING's Francesco Pesole remains unconvinced that July's growth changes the policy outlook, still expecting market expectations to unwind with a rate-hike bet of 48 basis points tightening by year-end and 110 basis points by July 2027.