FX.co ★ Sterling Falls on Thursday

The British pound slipped below $1.35 as investors weighed solid UK economic data against ongoing geopolitical tensions in the Middle East. UK GDP grew 0.4% quarter-on-quarter in the second quarter, in line with economists’ forecasts and following a 0.6% expansion in the first quarter. Activity in June was stronger than expected, with monthly GDP rising 0.3%. However, household consumption growth slowed to 0.2%, underscoring continued pressure on consumers. At the same time, efforts to resolve the US-Iran conflict and reopen the Strait of Hormuz remained deadlocked, with ongoing shipping disruptions and attacks dampening market sentiment. The Bank of England kept interest rates on hold in July, and Governor Andrew Bailey noted that the disinflation process remained on track despite persistent external risks.