GBP/USD: UK Economy Expands 0.1% in Q1, Pound Remains Subdued

The most recent GDP figures were released one day after the Bank of England raised rates for the twelfth consecutive time.

The GBP/USD remained unchanged and moved sideways near $1.2530 after the UK's first-quarter gross domestic product report revealed moderate growth. Consistent with forecasts, the British economy grew by a meagre 0.1% between quarters. Year-over-year, the figure was 0.2%, as anticipated.

The market welcomed the news of a positive growth rate after the United Kingdom's economy emerged from recession last month. Investors anticipated a worse-than-anticipated outcome after the services sector experienced a pervasive decline in March. Nonetheless, manufacturing's robust performance compensated for lacklustre results elsewhere.

The GDP report followed the Bank of England's most recent rate adjustment. In an effort to combat inflation, the British central bank increased interest rates for the twelfth consecutive occasion. Another 25-bps increase weighed on the British pound on Thursday as GBP/USD fell 1% to $1.2497.