EUR/GBP finds offers around 0.8470 ahead of UK GDP data

• EUR/GBP is sensing selling interest around 0.8470 despite the lower consensus for UK economic data.
• UK households are making higher payouts as subdued earnings are unable to offset soaring inflation.
• The second-tier Eurozone data is expected to display a vulnerable performance.

The EUR/GBP pair is facing barricades around the immediate hurdle of 0.8465 continuously since Thursday. The asset is expected to display topsy-turvy moves as investors await the UK Gross Domestic Product (GDP) data. On a broader note, the cross is advancing sharply higher in entire August after printing a three-month low of 0.8340.

According to the preliminary estimates, the UK economy has shrunk by 0.2% in the second quarter of CY2022 vs. the expansion of 0.8% recorded in Q1CY22. Also, the annual data is expected to shift lower to 2.8% from the prior release of 8.7%. A downside print in the growth rate indicates that the overall demand has dived significantly and eventually, the economic activities are facing a slowdown.

Soaring price pressures along with subdued Labor Cost Index are responsible for downward estimates of UK GDP data. The households are facing the headwinds of higher payouts due to surging cost pressures. Over that, subdued Average Hourly Earnings have forced them to slash their overall demand.

Adding to that, the Manufacturing Production data is also expected to display a vulnerable performance. The economic data is expected to slip lower to 0.9% against the former release of 2.3% on an annual basis. Adding to that, the monthly data is expected to display a de-growth of 1.8% against the previous print of 1.4%.

On the Eurozone front, Eurostat will report the Industrial production data, which are seen lower at 0.2% and 0.8% from their prior releases on a monthly and an annual basis respectively.