UK Q2 GDP growth met expectations at 0.6%, but June industrial production contracted 0.2%, weighing on the pound.
The British pound (GBP) remains subdued near 1.3500 against the US dollar (USD) in early London trading, as stronger-than-expected GDP data is offset by disappointing industrial output. UK second-quarter GDP grew 0.6%, matching the prior quarter and beating forecasts of a 0.4% slowdown, while June’s monthly GDP rose 0.3% after a flat May reading.
However, industrial production fell 0.2% in June, missing expectations of a 0.1% gain, with May’s decline revised deeper to 0.7%. Manufacturing output also shrank 0.5%, worse than the anticipated 0.2% drop, following a downwardly revised 0.2% contraction in May. Weak factory data highlights ongoing pressure from high energy costs linked to Middle East tensions.
The US dollar (USD) shows limited movement as easing inflation expectations reduce Federal Reserve rate-hike bets, capping further GBP gains.