GBP/USD is softened from several years as the market digests mixed macroeconomic data from the United Kingdom

• The GBP/USD moves down while the operators digest mixed macroeconomic data from the United Kingdom.
• The GDP growth of the United Kingdom in the first quarter is confirmed by 0.7%, but the real income of households falls dramatically.
• The current account deficit is extended more than expected, adding pressure to the sterling pound.

The sterling pound (GBP) weakens against the US dollar (USD) on Monday, since the mixed economic data of the United Kingdom weigh on the pound despite a generally moderate dollar. The GBP/USD torque experiences slight sales pressure after the publication of the first quarter’s GDP figures, decreasing from about its maximum of several years as the feeling of investors becomes cautious. Operators are relocated before key macroeconomic events, looking for clearer signals about the United Kingdom’s growth prospects and The Federal Reserve Policy Position (FED).

The GBP/USD torque is falling, quoting around 1,3685 at the time of writing during American negotiation hours, lowering more than 0.20% in the day. Despite the recent setback, the PAR is still within its peak of several years about 1,3770, which was touched on Thursday, with the largest upward trend still intact for now.

The economic data of the United Kingdom published earlier on Monday showed that the British economy expanded 0.7% in the first quarter, coinciding with the preliminary estimate and marking the strongest quarterly growth in a year. In annual terms, the Gross Domestic Product (GDP) increased by 1.3%, also in line with the initial estimate and unchanged with respect to the growth rate observed in Q4 2024.

However, the underlying details were less encouraging: the real available income of households collapsed 1.0%, the most pronounced fall since the beginning of 2023, since the increase in prices and fiscal charges eroded the purchasing power of the consumer. The household savings rate also fell to 10.9% from 12.0%, reflecting an exhaustion of savings to sustain spending.

Adding to the cautious tone, the current account of the United Kingdom was extended to 23.46 billion pounds in the Q1, compared to 21.03 billion pounds in the previous quarter and significantly above the market expectations of a deficit of 19.7 billion pounds.

Despite these winds against, the pound continues to receive modest support from the caution posture of the Bank of England (BOE), with officials who remain reluctant to start features of rates in the middle of a persistent inflation pressure, particularly in the service sector. This divergence of more moderate signals from other important central banks has helped cushion the fall in the GBP/USD in recent weeks.

That said, the Monetary Policy Committee (MPC) faces a delicate act of balance. While a stronger currency can help relieve imported inflation, the high sustained cost of indebtedness raises risks to the growth and spending of households. Future policy decisions will depend largely on incoming data, especially salary growth, services inflation and labor market conditions, since BOE It seeks to return inflation to its 2% goal without deepening the economic slowdown.