The British Pound faced a wave of selling pressure on September 12, 2025, as the latest batch of UK economic data painted a picture of stagnation and disappointment. The Office for National Statistics (ONS) confirmed that the UK economy showed no growth in July, with gross domestic product (GDP) flatlining at 0% month-on-month—a result that matched market expectations but underscored the nation’s ongoing economic struggles. This lack of momentum followed a modest 0.4% uptick in June, further fueling concerns about Britain’s recovery prospects.
According to FXStreet, the GBP/USD currency pair responded swiftly to the news, slipping to around 1.3550 in European trading hours, down roughly 0.15% on the day. The British Pound was notably weaker against the US Dollar compared to other major currencies, as shown by a currency heatmap published alongside the ONS data.
Yet, it wasn’t just the GDP figures that rattled investors. The UK’s industrial production fell by a sharp 1.3% month-on-month in July—well below expectations of no change and a marked reversal from the 0.5% rise seen in June. Manufacturing output also declined by 0.9% during the same period, rather than holding steady as many economists had forecasted. These twin disappointments signaled a broader weakness in the country’s industrial and manufacturing sectors, further diminishing hopes for a robust rebound in the second half of the year.
In the service sector, there was at least some stability: the index for July registered a 0.4% increase over the preceding three months, mirroring the performance recorded in June. However, this was little consolation in the face of broader stagnation, especially with the overall trade balance for July remaining unclear after a deficit of £5.015 billion was posted the previous month.
Market participants are now laser-focused on the Bank of England’s (BoE) next move. According to Reuters, there is a 33% chance that the BoE will cut interest rates again before the end of 2025. The central bank had already trimmed rates by 25 basis points in August, signaling a policy of “gradual and cautious” monetary easing. Most analysts, however, expect the BoE to hold rates steady at 4% during its upcoming policy meeting on September 18, as persistent inflationary pressures and economic uncertainty complicate the outlook.
“The GBP/USD pair could target immediate resistance at the three-month high of 1.3594, in line with the psychological level of 1.3600,” noted Akhtar Faruqui, an analyst at FXStreet. He added, “A move above this key resistance area would support the pair’s advance toward 1.3788, the highest since October 2021. On the downside, key support lies at the 9-day EMA of 1.3524, followed by the 50-day EMA at 1.3475. Breaking below these levels would weaken short- and medium-term momentum and push GBP/USD toward the seven-week low around 1.3253.”
Technical analysis released on September 12, 2025, showed GBP/USD trading around the 20-day exponential moving average (EMA) at 1.3487, forming an ascending triangle pattern. Resistance was identified near 1.3585, while support was seen at 1.3140. The 14-day Relative Strength Index (RSI) hovered between 40 and 60—signaling a market caught in a sideways drift. If the pair breaks lower, the next strong support is at the August 1 low of 1.3140, while a push higher could see resistance at the July 1 peak near 1.3800.
Meanwhile, across the Atlantic, the US economic picture is also shifting. The US Department of Labor reported that initial jobless claims for the week ending September 5, 2025, rose to 263,000—the highest level in nearly four years. This uptick in unemployment claims points to a softening labor market, which, in turn, is fueling speculation that the Federal Reserve will move to cut interest rates at its upcoming policy meeting on September 17. According to the CME FedWatch tool, traders currently see a 7.5% chance of a 50-basis-point rate cut, with the majority expecting a more modest 25-basis-point reduction.
Adding to the complexity, a revised nonfarm payrolls (NFP) report for the year ending March 2025 revealed that the US economy created 911,000 fewer jobs than previously estimated. Inflation, too, remains a concern: the headline US Consumer Price Index (CPI) rose by 2.9% year-on-year in August—up from 2.7% the month before—reflecting continued upward pressure on prices, partly as businesses pass on the impact of tariffs introduced during Donald Trump’s presidency to consumers.
Against this backdrop, investors are bracing for further volatility, with upcoming US consumer sentiment and inflation expectations data from the University of Michigan expected to provide additional clues about the direction of both economies and their respective currencies.
The British Pound’s recent struggles are hardly new. As one of the world’s oldest and most traded currencies—the Pound Sterling dates back to the year 886 and is issued by the Bank of England—it remains a bellwether for global forex markets. According to 2022 data cited by FXStreet, the Pound accounts for 12% of total FX turnover, with the GBP/USD pair (often nicknamed ‘Cable’) representing 11% of global volume. The currency’s fortunes are closely tied to the BoE’s policy decisions, with interest rates serving as the primary tool for maintaining price stability—typically targeting a 2% inflation rate.
When inflation runs hot, the BoE tends to raise rates to cool things down, making the UK more attractive to global investors. Conversely, when growth stalls and inflation ebbs, the central bank may cut rates to stimulate borrowing and investment. Recent data, however, suggest the BoE is walking a tightrope: inflation remains sticky, but economic growth is sputtering, leaving policymakers with few easy options.
Looking ahead, the next major trigger for the Pound will be the UK labor market report for the three months ending July, due out on Tuesday. With so much uncertainty swirling around both the UK and US economic outlooks, traders are likely to remain on edge, closely monitoring every data release and central bank pronouncement for hints about what comes next.
For now, the Pound’s fate hangs in the balance—caught between lackluster domestic data and shifting global monetary tides. Whether it can regain its footing will depend not just on numbers and charts, but on the confidence of investors and the decisions of central bankers on both sides of the Atlantic.
