The UK printed a positive growth number (0.2% MoM) for January, taking a first step to exit recession. The positive GDP print was largely expected, and the Pound did not move on the release. 

Markets are now pricing in slightly less than three rate cuts in the UK by year-end, with a June cut around 50% priced in and an August cut fully expected. 

We had deemed a break below 0.8500 as premature given the short-term EUR:GBP rate differentials, and we now expect some stabilisation around 0.8550 ahead of Friday’s UK data and the BoE meeting next week.