UK Economic Growth Data Weighs on Pound, Rate Cut Odds Rise

Weaker-than-expected UK economic growth data released on Wednesday is weighing on the pound, with the market seeing a higher chance of a rate cut by the Bank of England at its September 19 meeting, Monex Europe said.

“While swaps still imply a low probability of a BoE rate cut, early trading has seen the odds rise to 22% from 17% yesterday afternoon,” Monex analysts said in a note. However, the data was not “overly worrying,” with the UK Purchasing Managers’ Survey, which reflects economic conditions more promptly, showing growth is expected to pick up in August after sluggish economic activity in June and July.

Data from the UK Office for National Statistics showed that the UK economy unexpectedly remained flat for the second consecutive month in July.

Editor: Cui Kai