Markets will be watching closely on Thursday, when the United Kingdom’s (UK) Office for National Statistics (ONS) will release the advance estimate of Q4 Gross Domestic Product (GDP).
If the data land in line with consensus, the UK economy would have continued to grow at an annualised pace of 1.2%, compared with 1.3% recorded the previous year. If forecasts match, it would suggest a steady but uninspiring outcome, hinting that momentum is starting to level off. On a QoQ basis, GDP is expected to show a modest expansion of 0.2%, slightly above the 0.1% in Q3, reinforcing the idea of an economy still growing, but doing so with less energy.
The Bank of England’s (BoE) Monetary Policy Committee (MPC) expressed a slightly more optimistic outlook, projecting growth of approximately 1.5% for the entire year.
That said, the policy outlook remains finely balanced. Given the cooling labour market and slowing domestic inflation, markets anticipate a further 25 basis point rate cut from the ‘Old Lady’ at its March 19 meeting, provided that incoming data continues to support this view.
Projections for the UK GDP
The ONS reported that the UK economy grew by 0.1% QoQ in Q3 2025, matching the previous quarter’s prints. On a monthly basis, GDP grew by a healthier 0.3% in November, but momentum is expected to fade again, with output seen rising by only 0.1% in the final month of 2025.
The BoE’s latest meeting echoed the softer tone. Policymakers have downgraded their growth outlook and now expect GDP to expand by 0.2% in Q4 2025, up from a flat reading previously pencilled in for December but still pointing to a very subdued end to the year.
Inflation remains the more uncomfortable part of the picture. The UK maintains its leading position in the inflation league table among its major peers. The latest ONS data showed headline Consumer Price Index (CPI) inflation rising to 3.4% YoY in December. Core CPI eased only marginally to 3.2% YoY, while services inflation remained stubbornly high at 4.5%, underlining why policymakers remain cautious despite the clear loss of growth momentum.
When will the UK release Q3 GDP, and how could it affect GBP/USD?
The UK will release the preliminary Q4 2025 Gross Domestic Product (GDP) on Thursday at 7:00 GMT.
Pablo Piovano, Senior Analyst at FXStreet, says, “GBP/USD appears to have met some decent resistance at the 2026 ceiling at 1.3868 (January 27).”
“If bulls push harder, Cable could challenge the minor hurdle at the 1.3900 round level, ahead of the July 2021 peak at 1.3983 (July 21) and the weekly high at 1.4001 (June 23, 2021),” Piovano adds.
“On the flip side, the loss of the February base at 1.3508 (February 6) could see the interim 55-day SMA at 1.3455 retested, closely followed by the significant 200-day SMA at 1.3429,” he concludes.
Economic Indicator
Gross Domestic Product (YoY)
The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally speaking, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
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