Pound Ascends Amid Economic Resilience Despite Global Pressures

The British pound experienced a notable rise on Thursday, reaching a three-week high against the U.S. dollar, despite the latter's strength against other major currencies. This surge follows the release of UK GDP data revealing a slower economic decline than anticipated in the second quarter, providing some respite for finance minister Rachel Reeves amid global economic pressures.

Official numbers showed the UK's economy decelerated less than expected between April and June, thanks to a strong start to the year. This development aids the British government's budgetary objectives despite challenges from U.S. import tariffs and a weaker job market. Significantly, this economic resilience is reflected in the pound's 0.22% increase against the euro, reaching 86.01 pence.

Despite these encouraging indicators, concerns remain. UK labour data pointed to hiring weaknesses but persistent wage growth, posing problems for the Bank of England. The Bank faces the complex task of balancing economic slowdown and persistent inflation, with markets expecting it to maintain the current interest rate at 4.25% during its September meeting.

(With inputs from agencies.)