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    UK GDP for the month falls short of expectations, showing a decrease of 0.1%

    by VT Markets
    /
    Dec 12, 2025

    Economic Performance Influences

    Several factors may have impacted the monthly GDP numbers, but specific reasons weren’t provided. It’s important to keep an eye on upcoming economic reports for more details. As the year continues, these figures could shape economic strategies and forecasts. Regularly tracking these metrics is essential for grasping the overall economic situation. The unexpected 0.1% economic contraction in October supports our belief that the UK economy is slowing down. This is not an isolated case; it clearly indicates that the Bank of England’s recent rate hikes are starting to take effect. We anticipate this will put significant downward pressure on the pound in the coming weeks.

    Market Reactions and Predictions

    Due to this decline, the market is quickly reconsidering interest rate paths. There is a noticeable shift in SONIA futures, with traders now seeing a higher chance of a rate cut by the second quarter of 2026. Recent inflation data from November 2025 showed that headline CPI dropped to 2.8%, which strengthens the argument for the Bank of England to adopt a more cautious approach. For equity traders, this means being careful with UK-focused stocks, especially those in the FTSE 250 index. The latest GfK consumer confidence index, which reached a 12-month low in November 2025, supports the GDP data and signals a weak outlook for retail and hospitality sectors. We expect increased volatility, making protective put options on local indices a wise choice. This economic scenario reminds us of the technical recession we experienced in the second half of 2023, where a sharp slowdown followed aggressive monetary tightening. The pound is already testing key support levels against the dollar, having dropped 1.5% in the past month to around 1.2150. Any additional weak data, like the upcoming retail sales numbers, is likely to speed up this trend. Create your live VT Markets account and start trading now.

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