GBP/USD – UK economy beats expectations in Q2, US PPI stronger but not a concern

  • UK economy grew 0.5% in June, 0.2% in Q2 (QoQ)
  • US headline and core PPIs rose 0.3% last month, more than expected
  • GBPUSD steady near major support zone

The UK economy showed further resilience toward the end of the second quarter, buoyed by better weather.

The cost-of-living crisis has clearly been an immense drag on the economy and due to its nature, will have hit some households much harder than others. But overall, consumer activity has been very resilient which has ultimately stopped the economy from falling into recession, an outcome that now looks increasingly unlikely.

The economy grew 0.5% in June from a month earlier, much stronger than anticipated and contributing to 0.2% quarterly growth. That’s nothing to write home about, of course, and the economy still faces enormous challenges and pressures, but inflation falling below average earnings growth could enable that spending resilience to continue.

The pound was higher on the back of the data, although it gave back almost all of those gains against the dollar following the release of US PPI data, which was slightly stronger on both the headline and core level.

When taking the revisions and other data into consideration, the numbers aren’t too big a deal in reality although they do serve as a reminder that we are approaching a stage in which the stickiness of inflationary pressures could become more clear and frustrating.

Cable buoyed by data but remains near lows

It’s been a very choppy 24 hours amid all the data and the reality is that very little has changed from a technical perspective.


Source – OANDA on Trading View

The pair continues to trade around the recent lows and the 55/89-day simple moving average band. It has neither broken below these, which could be a very bearish development or rebounded higher in any significant way.

That may be a reflection of the fact that the data has been broadly bullish for the pair which could be a bearish signal, in theory. But in the absence of a break in either direction, it’s hard to say with any real conviction at this point.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.