UK Q2 GDP growth of 0.4% and strong private consumption lift GBP/USD above 1.3500, defying energy price shocks.
The British Pound has outperformed major currencies in August, with GBP/USD rising above 1.3500. UK economic resilience, driven by a 0.4% Q2 GDP expansion following 0.6% growth in Q1, has supported the currency amid energy price pressures linked to geopolitical tensions.
Private consumption, recovering business investment, and robust services and IT activity have underpinned growth. Business investment, stagnant since the 2016 Brexit vote, has regained momentum post-2020, providing a tailwind for the economy.
The pound’s strength reflects improved carry trade dynamics and better-than-expected economic performance, contrasting with earlier concerns over energy shocks and geopolitical risks.