Finance
Sterling set for weekly rise as UK economy bounces back in November
Published by Global Banking and Finance Review
Posted on January 16, 2026
Last updated: January 16, 2026
Pound Strengthens for Fifth Week as UK Economy Shows Resilience
UK Economic Growth and Currency Trends
By Joice Alves
Impact of GDP Data on Sterling
LONDON, Jan 16 (Reuters) - Sterling rose on Friday, and was set for its fifth consecutive weekly rise against the euro, after data this week showed that the British economy grew more strongly than expected in November.
Interest Rate Expectations
The pound was up 0.13% to $1.3402. It was on track for a 0.3% weekly rise, after two consecutive weekly declines.
Market Reactions and Future Outlook
The euro edged 0.06% lower against the pound to 86.69 pence, and was set for its fifth straight weekly decline against the pound.
Data on Thursday showed UK gross domestic product recorded the fastest growth in November since June, boosted by a return to full production at Jaguar Land Rover after a cyberattack that hit the carmaker and its suppliers.
Economists said the figures also suggested that nervousness about finance minister Rachel Reeves' annual budget statement on November 26 had not affected output as much as feared.
Investors continued to almost fully price in two quarter-point interest rate cuts by the Bank of England this year. But markets are not fully pricing in a 25-basis-point reduction until June, and they see only a 6% chance of a cut when the central bank meets next month.
"Sterling received a modest leg up on the (GDP data) news, and could be poised for further gains should the upbeat data dampen the likelihood of further BoE rate cuts," said Matthew Ryan, head of market strategy at Ebury.
Analysts said investors were turning to economic data as the boost fades from easing UK fiscal and political risks that has supported sterling since Reeves unveiled the November budget.
The next round of UK CPI inflation data is not scheduled until January 21.
(Reporting by Joice Alves. Editing by Mark Potter)
Frequently Asked Questions about Sterling set for weekly rise as UK economy bounces back in November
1What are interest rates?
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage. They influence economic activity by affecting consumer spending and investment.
2What is the UK economy?
The UK economy refers to the economic system of the United Kingdom, encompassing all economic activities, including production, consumption, and trade, and is measured by GDP.
3What are financial markets?
Financial markets are platforms where buyers and sellers engage in the trade of assets such as stocks, bonds, currencies, and derivatives, facilitating capital flow and investment.
