Euro rises vs British Pound amid hawkish ECB comments, mixed UK economic data

• EUR/GBP advances on Thursday, trading around 0.8485, up 0.24% on the day.
• UK GDP expands by 0.1% in May, in line with expectations, while Industrial Production disappoints.
• Hawkish comments from European Central Bank policymakers support the Euro.

EUR/GBP trades around 0.8485 on Thursday, up 0.24% at the time of writing, as investors digest a mixed batch of UK economic data and continued hawkish comments from European Central Bank (ECB) policymakers.

In the United Kingdom (UK), Gross Domestic Product (GDP) expanded by 0.1% MoM in May, matching market expectations after a 0.1% contraction in April. Meanwhile, Industrial Production declined by 0.5% MoM, missing forecasts, while Manufacturing Production rose by 0.1%. The data has only a limited impact on the British Pound (GBP), with traders remaining focused on the monetary policy outlook.

Money markets continue to fully price in a Bank of England (BoE) rate hike by the November meeting, as concerns that higher energy prices could fuel inflation reinforce expectations for a prolonged restrictive policy stance.

On the Euro (EUR) side, the shared currency remains supported by the cautious but hawkish tone from ECB officials. ECB President Christine Lagarde reiterated that policy decisions remain fully data-dependent, while Governing Council members Martin Kocher and Joachim Nagel stressed that the ECB stands ready to act if necessary to preserve price stability. These comments offset the unexpected contraction in Eurozone Industrial Production and continue to underpin the Euro.

According to Societe Generale, the recent decline in EUR/GBP now appears overstretched. Despite the cautious technical assessment, fundamental factors continue to support a resilient Euro against a British Pound that lacks fresh bullish catalysts following the latest UK macroeconomic releases.