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Figure Heloc 
BNP Paribas expects UK economic growth to slow to 0.7% in 2026 from 1.4% in 2025, with quarterly momentum dropping to about 0.1%. Inflation is projected to rise to 3.4% before easing only gradually, keeping it above the BoE target.
💡 DMK Insight
BNP Paribas’ forecast of UK growth slowing to 0.7% in 2026 signals potential headwinds for GBP traders. With inflation projected to rise to 3.4%, this could pressure the Bank of England to maintain a tighter monetary policy longer than expected. Traders should keep an eye on how these projections influence GBP/USD and GBP/EUR pairs, especially if inflation remains stubbornly above the BoE’s target. A slowdown in growth could also impact consumer spending and business investment, leading to a bearish sentiment in the UK equity markets. Watch for any shifts in market expectations regarding interest rate hikes, as these could create volatility in the forex market. If the BoE signals a more hawkish stance in response to inflation, we might see a short-term rally in GBP, but the overall trend could remain bearish if growth continues to falter. Keep an eye on the 1.20 level for GBP/USD; a break below could trigger further selling pressure.
📮 Takeaway
Watch GBP/USD around the 1.20 level; a break below could indicate deeper bearish sentiment as growth slows and inflation rises.
