EUR/GBP little changed as UK GDP growth matches estimates

The EUR/GBP currency pair was mostly steady in early European trade on Wednesday, after rebounding from a three-week low of 0.8499, as the latest data revealed UK economy had expanded 0.2% month-over-month in January, in line with market consensus.

The largest positive contribution to the GDP came from the services sector, as it registered a 0.2% growth following a 0.1% contraction in December.

Conversely, industrial production shrank at a monthly rate of 0.2% in January, after rising 0.6% in December. That figure was a result of a continued contraction in output for mining and quarrying (-1.3%) and water supply and sewerage (-2.2%), data by the Office for National Statistics showed.

Compared to January 2023, the UK economy shrank 0.3%, again in line with market estimates.

The GDP figures were released a day after separate data showed UK wage growth had been the slowest since October 2022 in January.

Market players bet that the Bank of England will probably be slower than the European Central Bank in easing monetary policy.

Markets are fully pricing a 25 basis point rate cut by the BoE by August, while the chance of a cut by June stands at nearly 50%.

Next, Euro traders will be paying attention to Euro Area’s industrial production figures for January due out at 10:00 GMT today.

Currency Pair Performance

As of 7:58 GMT on Wednesday the EUR/GBP currency pair was inching up 0.05% to trade at 0.8545.

Last Friday, the Forex pair went down as low as 0.8499. The latter has been the pair’s weakest level since February 14th (0.8498).