The latest GDP estimate from NIESR for the UK in October dropped sharply from 5.294% to 0%. This indicates that economic growth has come to a standstill over the past three months.

Market Movements

In financial news, the Dow Jones Industrial Average fell by 600 points. Traders are paying close attention to economic data from the Eurozone and are getting ready for upcoming US data releases. Currencies like GBP/USD and gold have faced pressure in the market. The GBP/USD fell below 1.3200, while the EUR/USD eased to below 1.1650. Gold dropped to $4,150 per troy ounce, and Bitcoin stabilized around $102,800. Ripple’s price fluctuated slightly below $2.50, amid positive sentiment in the cryptocurrency market. Speculation continues about potential interest rate changes from the Bank of Japan, which currently stands at 0.5%.

Insight and Analysis

You can find more details in FXStreet’s daily newsletter and various market analyses, all provided within legal terms and responsibility guidelines. The UK economy is showing a significant slowdown, with the latest three-month GDP growth estimate dropping to zero. This sudden change was confirmed by a recent report from the Office for National Statistics showing a 0.2% contraction in September 2025. This indicates that the Bank of England’s recent rate hikes have halted growth. As a result, the market is now expecting a more dovish stance from the BoE, making further interest rate increases unlikely this year. Given this situation, it may be wise to adopt bearish positions on the Pound Sterling. While the US dollar also appears to be weakening, the UK’s significant growth issues likely make GBP the weaker option. Derivative traders might consider buying puts on GBP/USD or entering short futures contracts, aiming for levels below 1.3000 in the upcoming weeks. In the US, caution from the Federal Reserve is also affecting the appeal of the dollar. The latest CPI data, released on November 12, 2025, showed inflation cooling to 2.8%, which gives the Fed flexibility to pause or even change course. This is reflected in fed funds futures, with the CME’s FedWatch Tool suggesting a 70% chance of a rate cut by the March 2026 meeting. Slowing global growth is increasing fear in equity markets. The CBOE Volatility Index (VIX) has risen above 22, a level not seen since the banking stresses of early 2024. This suggests that traders should consider protective measures, like buying puts on the S&P 500 or using options strategies that benefit from increased market fluctuations. A clear gap is forming between the Bank of Japan and Western central banks. With the BoJ still contemplating its next rate hike from 0.5%, the Yen has potential as a safe-haven currency with a supportive policy environment. This difference makes shorting USD/JPY an interesting strategy, especially as the pair has already decreased due to weak US data. Create your live VT Markets account and start trading now.

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