Pound Falls to Over Three-Month Low on Weak UK Data

2026-03-13 08:39 By Joana Ferreira 1 min. read

The British pound extended its losses, falling below $1.33 and reaching its weakest level since early December, as investors reacted to disappointing UK economic data and growing geopolitical tensions that strengthened the US dollar.

Data from the ONS showed that UK GDP was flat in January, missing market expectations of 0.2% monthly growth.

The services sector recorded no growth, while production output declined by 0.1%.

Meanwhile, escalating tensions involving the US, Israel, and Iran pushed oil prices above $100 per barrel as the conflict showed no signs of easing.

The surge in energy prices has heightened concerns about renewed inflationary pressures in the UK.

Despite the weak growth outlook, rising inflation risks mean the Bank of England is now expected to keep interest rates on hold for longer, with the possibility of further tightening.

Markets currently price in roughly an 80% probability of a 25-basis-point rate hike by the end of the year.



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