UK GDP grew 0.3% QoQ and 1.2% YoY in Q2, beating forecasts and signaling solid activity, but the data had little impact on sterling as BoE policy remains driven by inflation and labour market trends, ING's FX analyst Francesco Pesole notes.
Growth resilience fails to lift GBP
"The UK published stronger-than-expected growth figures for 2Q: 0.3% QoQ and 1.2% YoY. That shows decent underlying activity growth despite the tariff-induced downward distortion."
"It’s positive news for the gilt market ahead of the Autumn fiscal event, but it doesn’t change the narrative for the Bank of England at this moment (inflation and jobs markets are the two main inputs), hence the reaction in sterling has been muted."
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