The British pound has edged lower at the start of the week. GBP/USD is trading at 1.3689 down 0.19% in the North American session.
UK GBP for Q1 higher than expected
The UK economy grew by 0.7% q/q, unchanged from the initial estimate. This follows a gain of 0.1% in Q4 2024 and marked the strongest growth in a year. The gain was driven by strong growth throughout the economy, including a 0.7% gain in the services sector.
The strong GDP report is very welcome news for the UK government, as there have been warnings of economic doomsday due to the government’s tax-and-spend policy. Finance Minister Reeves will be able to silence her critics, as the 0.7% GDP gain was the best in the G-7.
Still, Reeves may not be out of the woods just yet. Much of the economic strength in the first quarter could be a result of companies rushing to spend before US President Trump’s tariffs took effect in April. There are concerns that the Q1 GDP is a one-time blip and that growth will taper off in the coming quarters.
The Bank of England remains concerned about the UK economy, although today’s positive GDP will be welcome news. The Bank held the cash rate at 4.25% last week as inflation remains stubbornly high. The BoE said that underlying growth was “weak” and it’s clear that the Bank would like to boost the economy with a rate cut but can’t do so until inflation shows signs of easing.
US consumer spending (PCE) declines by 0.1%
The US continues to show signs that the economy is slowing down. GDP was revised down to -0.5% in the first quarter. US consumer spending for May (PCE) recorded a 0.1% decline, following a 0.2% gain in April and shy of the consensus of 0.1%. This was the first contraction since January. If economic data continues to head lower, pressure will increase on the Federal Reserve to lower interest rates, which isn’t expected before September.
GBP/USD Technical
- GBP/USD is putting pressure on support at 1.3682. Next, there is support at 1.3665
- There is resistance at 1.3712 and 1.3729
Opinions are the authors’; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2025 OANDA Business Information & Services Inc.
About the Author
Kenneth Fisher
Market Analyst
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.
His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet.
Based in Israel, Kenny has been a MarketPulse contributor since 2012.
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.
His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet.
Based in Israel, Kenny has been a MarketPulse contributor since 2012.
