GBP/USD: UK Pound Steady Near $1.35 After First-Quarter Growth Hits 0.6

Key points:

Economic growth in the UK means that the Labour government, with Starmer under pressure now, could breathe more easily.

🏆 UK Economy Delivers a Win

UK economy grew by 0.6% in the first quarter. Not exactly fireworks in the making, but certainly a relieved exhale in Westminster.

That was in line with economists’ expectations and marked a clear acceleration from the 0.2% expansion previously reported for the previous quarter. After months of doom-laden headlines, Britain finally has an economic number that takes some of the pressure off.

Even March alone saw growth of 0.3%, suggesting the economy kept rolling despite the inflation shock and energy chaos triggered by the Middle East conflict.

📈 Growth Was Broad—The

hovered near $1.3520 early Thursday after fresh data showed the based too

The expansion wasn’t carried by just one lucky sector. Services, manufacturing, and construction all contributed to the stronger GDP figure—a healthier setup than growth driven by one-off spending bursts.
Quick jargon check: GDP, or Gross Domestic Product, measures the total value of goods and services produced in an economy. When GDP rises, it generally signals stronger economic activity.
The resilience is particularly notable given soaring oil prices and disruptions around the Strait of Hormuz, which have pushed energy costs sharply higher across Europe and beyond.

🏦 Bank of England Faces a Dilemma

Stronger growth could ease some political pressure on Keir Starmer and the Labour government, which has been battling unhappy voters, internal tensions, and rising inflation fears.
But better economic momentum also complicates life for the Bank of England. Policymakers are now weighing whether inflation pressures tied to higher energy prices may require interest-rate hikes instead of cuts.
This makes for an interesting setup, as currency speculators know: stronger growth supports the pound, but persistent inflation and tighter monetary policy could keep volatility elevated. The UK economy may be settling down but the macro drama is nowhere near being cancelled