GBP traded mixed against its major counterparts in the European session on Thursday as investors digested the latest comments of the Bank of England's (BoE) governor Bailey and continued to assess the prospects of the UK's economy after yesterday's release of the gloomy Q1 GDP data. The pound demonstrated declines against USD, JPY and CAD, gains against AUD and NZD and little change against CHF and EUR.

The BoE's governor Andrew Bailey said on Thursday that it is unquestionably that the UK's economy is "in a major downturn" and the downturn could be "30%, more or less". He also suggested that "there will be a re-opening of the economy later". At the same time, Bailey noted that markets have calmed down since central bank action took place, but underlying fragility still remains. He also reaffirmed that negative rates are not on the table at the moment, but added that "it's always wise not to rule anything out forever".

The Office for National Statistics (ONS) reported on Wednesday that the UK's GDP fell 2% q/q in the first quarter of 2020, which marked the worst decline since the global financial crisis of 2008. On a yearly basis, GDP decreased 1.6%, the biggest contraction since late 2009. Meanwhile, the National Institute for Economic And Social Research (NIESR) said its estimates showed that the UK's economy in the second quarter would collapse by about 25-30% due to the lockdown imposed to slow the spread of the coronavirus.

The COVID-19 situation and uncertainty over ongoing post-Brexit trade talks also continued to weigh on the pound. The UK's coronavirus death toll passed 40,000, cementing the country as the worst-affected one in Europe.