GBP/USD: Sterling Powers Up After UK Growth Beats Forecasts

The UK’s economy advanced at a faster-than-expected growth rate in January, fueling a pound rally.

• The GBP/USD soared on Friday as gross domestic product rose 0.3% in January, following a 0.5% contraction the previous month. What’s more, the data came in better than analyst estimates for a 0.1% expansion. “Confidence is returning,” said Rishi Sunak, the UK Prime Minister.
• What’s behind the growth momentum? A notable improvement in the services sector drove the narrative – education, transport and storage, and human health activities helped push the figure above expectations. The latest GDP number added to signs that the UK might avoid a deep recession.
• The British pound rode the wave of optimism to almost exit a losing week. The GBP/USD finished the past week flat near $1.2040, after erasing a 2% decline to $1.1790. The UK currency has recently been rattled by inflation jitters, social unrest, and government interventions.