UK GDP grew 0.4% in December, beating estimates of a 0.1% growth rate, and up from a 0.1% growth rate in November. 

UK GDP growth clocked in at 0.1% in the fourth quarter of 2024, beating estimates of a 0.1% contraction, and compared to a flat growth in the third quarter.

Sterling rose in European trade on Thursday against the dollar, resuming gains after important UK growth data for the last quarter of last year.

The data could provide fresh pricing for the odds of a UK interest rate cut in March, with markets still expecting such a cut as inflation cools.

The Price

The GBP/USD pair rose 0.45% today to $1.2497, the highest since February 6, with a session-low at $1.2439.

The pound lost 0.1% yesterday after a 0.65% surge in the previous day as the risk appetite improved.

UK Rates

Bank of England Governor Andrew Bailey warned that the UK economy is slowing down, and expressed concerns about global trade tensions which could impact the economic outlook.

The odds of a BOE interest rate cut in March are currently standing at 70%.

Interest rate futures estimate 65 basis points of total BOE rate cuts by the end of 2025.

Now traders await official UK growth data later today for the last quarter of 2024 and for December separately. 

UK GDP growth is estimated down 0.1% in the fourth quarter of 2024, and up 0.1% in December. 

The Japanese yen rose in Asian trade on Thursday against a basket of major rivals, recovering from a two-week trough against the dollar and on track for the first profit in four days as inflationary pressures mounted in Japan.

The yen is boosted by a stall in US 10-year treasury yields before important US producer prices and unemployment claims data today.

The Price

The USD/JPY fell 0.2% today to 154.12 yen per dollar, with a session-high at 154.67.

The yen lost 1.3% against the dollar on Wednesday, the third loss in a row, and the heftiest in 2025, plumbing a two-week trough at 154.870 yen as US treasury yields surged following hot US inflation data.

Inflationary Pressures

Earlier Tokyo data showed producer prices rose 4.2% y/y in January, the best pace since May 2023, passing estimates of a 4% rise.

It’s an indication of what consumer prices will likely show for February, as inflationary pressures increase on policymakers in Japan.

Japanese Rates

Following the data, the odds of a Bank of Japan interest rate hike in March rose from 70% to 75%.

US Treasury Yields

US 10-year treasury yields fell 0.5% on Thursday away from a three-week high at 4.66%, on track for the first loss in six sessions, in turn hurting the greenback’s standing.

It comes ahead of major US data on unemployment claims and producer prices, which would provide fresh pricing for the odds of a Fed rate cut in March.

According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in March stood at just 2.5%.