British Pound Declines as GDP Data Falls Short, Strengthening Case for Rate Cut

Written by Emily J. Thompson, Senior Investment Analyst

Source: InvestingliveForex

Updated: Dec 12 2025

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Source: InvestingliveForex

UK GDP Decline: The UK GDP fell by 0.1% in the three months to October 2025, marking the first decline since December 2023, primarily due to a significant drop in motor vehicle manufacturing.
Market Reaction: Following the GDP report, the British Pound weakened, reinforcing expectations for rate cuts, with market probabilities for a cut at the next meeting remaining around 90%.
Future Data Impact: Upcoming UK employment and inflation data could further influence the Pound, with weak results likely leading to increased expectations for rate cuts in 2026, while strong data may prompt a more hawkish outlook.
Easing Expectations: The total expected easing increased from 57 basis points to 60 basis points after the GDP report, indicating a shift in market sentiment regarding future monetary policy.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.