EUR/GBP ticked up as ECB hawkish expectations supported the euro. ONS: June GDP
+0.3% MoM (consensus 0.0); Q2 GDP +0.4% q/q, in line with expectations but below
Q1’s +0.6%; YoY GDP +1.2% (consensus 1.1, prior 0.9). Standard Chartered says Q2
outturn exceeds the BoE’s July projection of q/q +0.3% but is unlikely to drive
policy. Analysts flag inflation data (so far holding up) and a still-weak labor
market as more important for rate decisions. With policy already viewed as
restrictive, Standard Chartered keeps its call that the BoE will hold rates this
year. Traders are focused on next week’s UK CPI for fresh policy clues. At the
last meeting most BoE policymakers said financial conditions had tightened since
the Middle East war, providing "sufficient insurance" against inflation risk
from higher energy prices.
