British Pound: Resilient Growth Supports Rise Against US Dollar – MUFG

Lee Hardman from MUFG reports that the British Pound (GBP) was the best-performing major currency in August, with GBP/USD rising back above 1.3500. The UK economy proved resilient to the energy price shock linked to the US-Iran conflict, with second-quarter GDP rising 0.4% following 0.6% growth in the first quarter. Strong private consumption, recovering business investment, and solid services and IT activity supported the currency. Pound strength continues to be supported by economic data and carry. The economy grew 0.4% in the second quarter after strong growth of 0.6% in the first quarter. After stagnating following the Brexit vote in 2016 until the COVID shock in 2020, business investment has since regained upward momentum, providing a boost to the UK economy.