The pound sterling edged lower on Wednesday after UK GDP growth fell below market expectations, signaling renewed concerns about the economy’s recovery. The weaker-than-anticipated data dampened investor sentiment and weighed on the British currency.
Adding to the pressure, the latest factory output figures showed a sharper contraction in manufacturing activity, reinforcing fears of a slowdown in the industrial sector. These developments have cast doubt on the Bank of England’s ability to sustain aggressive monetary tightening, further limiting the pound’s appeal.
Despite the setbacks, the currency held above critical support levels as traders awaited upcoming UK employment and inflation reports for further clues about the economy’s trajectory. The pound’s near-term performance remains tethered to these data points and evolving monetary policy expectations.
Analysts note that while the pound’s retracement reflects immediate economic concerns, its broader outlook could stabilize if upcoming data surprises to the upside or global risk sentiment improves. For now, caution prevails among market participants.
