Sterling Gains as UK Growth Accelerates
NEWS | 08/21/2025 – 08:53 GMT
The Pound Sterling (GBP) strengthened against its major peers on Thursday following the release of stronger‑than‑expected preliminary S&P Global Purchasing Managers’ Index (PMI) data for the United Kingdom in August. The Composite PMI rose to 53.0, exceeding both the consensus forecast of 51.6 and July’s reading of 51.5, marking the fastest pace of expansion in a year.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, commented: “The flash UK PMI survey for August indicated that the pace of economic growth has continued to accelerate over the summer after a sluggish spring, with the rate of expansion now at a one‑year high. The services sector has led the expansion, but manufacturing also showed further signs of stabilising.”
Persistent inflationary pressures are expected to make Bank of England (BoE) policymakers reluctant to cut interest rates for the remainder of the year. Data from the Office for National Statistics (ONS) on Wednesday showed that the headline Consumer Price Index (CPI) rose at an annual rate of 3.8% in July — the highest in nearly 18 months — with core CPI matching that pace.
Earlier this month, the BoE lowered interest rates by 25 basis points to 4% in a narrow decision, while signalling a “gradual and careful” approach to further easing.
Analysts noted that gains in the US Dollar were supported by expectations that Powell might lean toward a hawkish stance, potentially tempering investor optimism.