GBP/USD Up on Positive Growth Data

The British pound climbed to $1.2560 after preliminary data showed the UK economy grew by 0.1% in the final quarter of 2024, defying expectations of a 0.1% contraction and outperforming the Bank of England’s forecasts. This puts the economy slightly ahead of where it was when Labour took office in July, offering some relief to the government.

However, challenges remain as the Office for Budget Responsibility is set to release an updated economic and fiscal outlook on March 26, with reports indicating a lowered growth forecast. Meanwhile, the Bank of England cut interest rates by 25bps to 4.5% last week, its third reduction since beginning its easing cycle in August 2024, while also downgrading its 2025 GDP growth forecast to 0.7%.

1.2600 is the first resistance level, with further targets at 1.2650 and 1.2700 if the pair moves higher. On the downside, 1.2340 serves as the first support level, followed by 1.2265 and 1.2100 if selling pressure intensifies.