Sterling little changed by Britain's 4.8pc GDP growth in Q2

LONDON: Sterling was little changed on Thursday as analysts expected the Bank of England to make no moves in its monetary policy after official data showed Britain's economy grew in line with expectations in the second quarter.

The Office for National Statistics said the economy grew by 4.8% in the second quarter, in line with a Reuters poll of economists' quarter-on-quarter expectations.

Analysts said the BoE was unlikely to make a move on the data. "The data is unlikely to move the needle on the BoE story and perhaps a widening trade deficit also prevents GBP from moving too much higher," ING told their clients in a note.

British GDP remained 2.2% smaller than it was before the pandemic, a reminder of the damage done by Britain's long coronavirus lockdowns last year.

Analysts also said they expected economic growth in Britain to slow down in the second half of the year. The GDP figures have yet to show the impact of a surge in coronavirus cases in July.

Finance minister Rishi Sunak repeated that he had no plans for a further extension of the furlough programme.

Stuart Cole, head macro economist at Equiti Capital in London, said "it is quite likely that the pace of growth has already peaked".

"For sterling, while the economic landscape continues to provide solid support, it does suggest further topside progress will be slow," he added.

Sterling edged 0.1% lower versus the dollar at $1.3848 by 1110 GMT, after rising in the previous session interrupting a 3-day losing streak versus the greenback.

Versus the euro, the pound traded just off 18-month highs touched on Tuesday and was 0.1% lower on the day, exchanging hands at 84.75 pence. On a positive note, consumer spending in the week to Aug. 5 rose to within a whisker of its February 2020 level, according to other data published on Thursday.