Pound Sterling Rises After Revised UK Q3 GDP Confirms Modest Growth

Pound Sterling strengthened against its major peers on Monday after revised UK economic data confirmed that the economy avoided contraction in the third quarter. The update offered short-term relief to investors, helping the British currency outperform during the European trading session.

Sterling rose by around 0.45%, pushing close to the 1.3440 level, after the Office for National Statistics confirmed that UK gross domestic product expanded by 0.1% quarter-on-quarter in Q3. The revised figure matched the preliminary estimate and showed annual growth holding steady at 1.3%.

UK GDP Revision Offers Temporary Support

The confirmation of modest growth helped ease immediate concerns about economic momentum, but analysts expect the impact on Pound Sterling to be limited. Market attention remains focused on the final quarter of the year, where conditions appear more fragile.

The Bank of England recently warned that economic activity could stall in Q4. This followed a narrow 5–4 vote to cut interest rates by 25 basis points to 3.75%. Adding to the cautious outlook, official data showed the UK economy unexpectedly contracted by 0.1% in October, raising concerns about near-term growth prospects.

With few major UK data releases scheduled in the coming days, expectations surrounding future Bank of England policy decisions are likely to play a key role in shaping Pound Sterling movements. The central bank has reiterated that its policy path remains “gradually downwards,” keeping markets alert to further guidance.

US Dollar Weakness Lifts GBP/USD

Sterling also gained support from a softer US Dollar. The GBP/USD pair advanced as investors grew cautious ahead of the release of preliminary US Q3 GDP data. The US Dollar Index slipped toward the 98.50 area, reflecting reduced demand for the Greenback.

Technical breakdown of Pound Sterling’s recent performance vs the U.S. dollar, including resistance levels and the impact of UK economic data on GBP/USD.

US economic growth is expected to slow modestly, which could influence expectations around Federal Reserve policy. However, Fed officials have continued to signal patience, with policymakers arguing against further rate cuts in the near term.

Technical Outlook Remains Constructive

From a technical perspective, Pound Sterling remains well supported. GBP/USD is trading above its rising 20-day exponential moving average, reinforcing a bullish bias. Momentum indicators suggest further upside potential, with a break above resistance near 1.3470 likely to attract additional buying interest.

Overall, Pound Sterling continues to benefit from supportive technical signals and a weaker US Dollar, even as concerns about UK growth persist.

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