Sterling Strengthens After Surprise GDP

2026-10-15 07:36 By Agna Gabriel 1 min. read

The British pound strengthened to around $1.325 after data showed the UK economy grew more than expected in August, reinforcing speculation that the Bank of England could raise interest rates next month.

GDP increased by 0.1% in August, following a 0.4% expansion in July and defying forecasts of a contraction.

Output also rose 0.7% over the three months to August, marking the fourth consecutive month in which growth surpassed expectations.

The figures suggest that businesses have remained resilient despite elevated energy costs and high borrowing expenses.

Several Bank of England policymakers are monitoring the stronger activity data, particularly as the energy shock linked to the Iran war adds to inflation concerns.

Attention now turns to Chancellor John Healey’s first budget on October 28, which comes amid tight public finances and market volatility.

While the IMF has welcomed the government’s plans to reduce the deficit, pressure remains to ease household cost-of-living strains.



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Sterling Strengthens After Surprise GDP
The British pound strengthened to around $1.325 after data showed the UK economy grew more than expected in August, reinforcing speculation that the Bank of England could raise interest rates next month. GDP increased by 0.1% in August, following a 0.4% expansion in July and defying forecasts of a contraction. Output also rose 0.7% over the three months to August, marking the fourth consecutive month in which growth surpassed expectations. The figures suggest that businesses have remained resilient despite elevated energy costs and high borrowing expenses. Several Bank of England policymakers are monitoring the stronger activity data, particularly as the energy shock linked to the Iran war adds to inflation concerns. Attention now turns to Chancellor John Healey’s first budget on October 28, which comes amid tight public finances and market volatility. While the IMF has welcomed the government’s plans to reduce the deficit, pressure remains to ease household cost-of-living strains.
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