The British Pound is under pressure, hovering around the $1.36 level, due to weaker-than-expected UK economic growth figures and political uncertainty. Investors are pricing in further monetary easing from the Bank of England, contributing to the Pound’s struggles. The currency pair is awaiting US consumer inflation figures for fresh impetus.
- UK Q4 2025 GDP expanded by 0.1%, falling short of the 0.2% forecast.
- Annual GDP growth was 1.0%, the slowest since Q2 2024 and below expectations.
- Industrial output and construction contracted unexpectedly.
- The Bank of England left interest rates unchanged at 3.75% but signaled a dovish stance.
- Investors are pricing in 50 bps of rate cuts by the BoE this year.
- UK Prime Minister Keir Starmer faces political turmoil.
- The GBP/USD pair recovered above 1.3600 but lacks strong bullish conviction.
- The US Dollar is supported amid a softer risk tone.
The economic data presents a challenging outlook for the Pound. Subpar growth figures and the prospect of interest rate cuts by the central bank are weighing on the currency. Political uncertainty adds another layer of concern. The performance of the Pound may be further influenced by external factors, such as the US Dollar’s strength and upcoming US economic data releases.