On Thursday, the British pound jumped after fresh data showed the UK economy unexpectedly grew in the final quarter of 2024. The GBP/USD pair climbed 0.57% to 1.2515, reaching its highest level in over a week. This boost came after the UK’s GDP expanded by 0.1% in Q4, defying forecasts of a 0.1% contraction.
Why the pound is rallying
The upbeat GDP data surprised markets, showing the UK economy grew at an annual rate of 1.4%, surpassing the expected 1.1%. The positive numbers helped ease recession fears and lifted investor sentiment toward the pound. Meanwhile, a broader shift in risk appetite further pressured the U.S. dollar, helping GBP/USD push higher.
Market outlook
The pound’s strength will depend on whether the UK economy maintains growth momentum and how global risk sentiment evolves. With ongoing trade policy uncertainty from the U.S. and geopolitical tensions in focus, volatility in forex markets is likely to continue.
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