RismadarVoice Reporters
September 11, 2026
The British pound strengthened on Friday after new economic data showed the United Kingdom’s economy expanded faster than expected in July, providing fresh support for the currency amid ongoing concerns over inflation and energy costs.
Figures released by the Office for National Statistics showed that the UK economy grew by 0.4 per cent in July, exceeding economists’ expectations of no growth during the month.
The growth was largely driven by the services sector, which expanded by 0.4 per cent, helping to maintain a stronger-than-anticipated economic performance in the first half of 2026.
Sterling rose about 0.1 per cent against the US dollar to trade at $1.352 and gained similarly against the euro, which fell 0.1 per cent against the pound to 85.84 pence.
The latest figures showed that the UK economy expanded by 1 per cent during the first half of the year, the fastest growth rate among the Group of Seven (G7) economies, although some analysts cautioned that adjustments to seasonal data could affect the final figures.
Deutsche Bank UK chief economist Sanjay Raja said investment in artificial intelligence and growth in sectors such as telecommunications and information services had contributed to the economy’s recent performance.
However, economists warned that rising energy prices linked to tensions in the Middle East could pose risks to future growth. Brent crude prices recently climbed to about $110 per barrel, increasing concerns over inflationary pressures.
Higher energy costs have also pushed financial markets to increase expectations of possible interest rate rises, contributing to a rise in UK government bond yields.
Britain’s benchmark 10-year government bond yield climbed to its highest level since 2007, while the 30-year yield reached levels not seen since 1998.
Markets expect the Bank of England to keep its benchmark interest rate unchanged at 3.75 per cent at its next meeting, but traders are increasingly pricing in a possible rate increase later in the year.
Bank of England Governor Andrew Bailey, however, has cautioned that market expectations partly reflect concerns over future energy price increases rather than a certainty that rates will rise.
