GBP flows: GBP gains on better than expected GDP

UK June and Q2 GDP have come in much stronger than expected at 0.4% m/m and 0.3% q/q respectively, driven by gains in services and construction. This follows a 0.7% gain in Q1 and negative GDP growth in April and May, both of which likely reflect activity being brought forward into February and March ahead of stamp duty and US tariff changes. The data is certainly GBP supportive, reducing the urgency for rate cuts, even though per capita GDP growth is less strong at 0.2%. EUR/GBP is slipping towards support at 0.86, and may manage a serious test of this level in response to what is significantly stronger than expected data.