Pound Sterling Weakens After Softer UK GDP, Bolstering BoE Rate Cut Bets

The British pound (GBP) continued to struggle against the US dollar as fresh economic data showed the UK economy expanded by only 0.1 % in the fourth quarter of 2025, falling short of forecasts and supporting expectations that the Bank of England (BoE) may cut interest rates in March. This weaker growth has put renewed pressure on the GBP/USD currency pair, which remained under pressure over multiple trading sessions.

The Office for National Statistics reported that the UK’s quarterly growth fell below the market forecast of 0.2 %, while annual GDP expanded by roughly 1.0 %, again missing expectations. Industrial production and consumer activity also disappointed analysts, reinforcing concerns about the pace of the economic recovery. Analysts say this weak print adds to existing pressures on sterling as traders price in further BoE easing.

Despite these challenges, the UK currency has so far held above key support levels, reflecting persistent demand for GBP on risk-on sessions, although the overall trend remains downward.

Recent GBP/USD Technical Analysis & Forecast

This recent video provides a technical and fundamental overview of GBP/USD following the latest UK GDP figures and broader market dynamics.

Weak Growth Fuels BoE Cut Speculation

Traders reacted to the softer GDP print by increasing bets that the BoE will reduce borrowing costs, a trend further supported by disappointing industrial data and subdued consumer spending. Lower expected interest rates typically weaken a currency, and in this case, the economic news has reinforced the narrative that sterling may remain under pressure unless growth rebounds.

Meanwhile, strong US economic figures — including recent jobs data — have bolstered the US dollar (USD), adding to the downward momentum in GBP/USD. The market continues to watch upcoming US Initial Jobless Claims and consumer inflation data for further direction, as these figures could influence the Federal Reserve’s rate path — which in turn affects relative currency valuations.

In the near term, traders will likely keep a close eye on key levels around the 1.3600 support zone. A break below could signal further bearish momentum for GBP/USD, while any unexpected data surprises could quickly reshape currency dynamics.

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