British Pound Holds Steady Amidst Economic Stagnation

The British pound remained steady after reaching a three-week low against the dollar. This followed data showing the UK's economy stagnated in July. The focus is now on next week's inflation data and central bank meeting. Sterling traded in a tight range against the dollar and euro, with interest rates likely to remain unchanged.

The British pound held its ground on Thursday, following a dip to a three-week low against the dollar the previous day. The drop came in response to data indicating the UK's economy showed no growth in July, while attention now shifts to next week's crucial inflation data and central bank meeting.

On Thursday, sterling was steady, trading at $1.3052, slightly above Wednesday's low of $1.30025, its lowest since August 20. Data from the Office for National Statistics revealed no change in economic output for July, contrary to economists' predictions of a 0.2% growth. Despite stalled growth in recent months, the UK economy has outperformed the eurozone since the start of the year.

Against the euro, the pound remained stable at 84.4 pence ahead of the European Central Bank's interest rate decision, where a quarter-point rate cut is anticipated. Meanwhile, the Bank of England's decision next week is expected to leave rates unchanged, following a 25 basis point cut in August. Analysts predict inflation and interest rate factors will support the pound in the coming weeks.

(With inputs from agencies.)