Sterling was little changed against the dollar on Thursday after official figures showed the UK economy grew 0.7% in the third quarter, matching market expectations. The pound was down 0.06% at $1.3271, Reuters reported, while it edged up to 83.57 pence per euro, close to its strongest level against the single currency since May 2025.

The dollar, meanwhile, climbed to a 19-month high against a basket of major currencies, as hotter-than-expected US inflation data kept expectations of another Federal Reserve rate rise in December firmly in place. Sterling has now fallen for three consecutive sessions, and it traded near $1.3274 at 0915 GMT after recovering from an earlier low near $1.3250, LiteFinance reported.

The growth figures had little immediate effect on the pound because they landed in line with forecasts, but they supported the Bank of England's decision last week to raise interest rates, Societe Generale strategist Kenneth Broux told Reuters. The Bank raised Bank Rate to 4% last week, its first increase in more than three years, and markets now assign roughly a 75% chance to another rise in December, Reuters reported.

Traders await Fed comments

Attention later on Thursday turns to comments from New York Fed President John Williams, after hotter-than-expected US inflation data and hawkish remarks from several Fed officials reinforced expectations of further tightening, Reuters reported.

The Office for National Statistics figures also showed the economy grew 1.9% over the year to September, while monthly GDP rose 0.2% in September, beating expectations of no growth, LiteFinance reported.

Sources: Reuters, LiteFinance