**GBP/USD Outlook: UK House Prices Edge Up 2.4% in October as Pound Slides Toward 1.31**
*Original reporting credit: Skerdian Meta, FX Leaders*
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## Introduction
The GBP/USD currency pair faces renewed pressure as the British Pound continues to decline towards the critical 1.31 psychological support level. This downward drift happens despite better-than-expected housing data from the United Kingdom, which shows house prices inching up 2.4 percent in October. As macroeconomic and fundamental drivers take center stage, traders and investors are closely scrutinizing what lies ahead for sterling, especially in relation to fresh data, evolving monetary policy, and broader risk sentiment.
This article delves deep into the latest UK house price data, fundamental and technical factors impacting GBP/USD, and possible trajectories for the currency pair in the coming months.
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## UK House Price Growth in October 2025
One of the key data releases supporting the British Pound in early trading was October’s house price report. According to Nationwide, the UK’s largest building society, property values saw a positive surge despite persistent macro headwinds. This reading comes amid a complex backdrop of economic recovery and persistent cost of living challenges.
### UK House Price Highlights
– **Monthly Increase:** 2.4% rise in house prices for October, surpassing consensus forecasts of 1.8%
– **Annual Growth:** Year-on-year prices accelerated to 4.3%, up from 3.7% recorded in September
– **Regional Activity:** Growth strongest in London and the Southeast, with more subdued gains in the North and Midlands
– **Sales Volume:** Modest uptick, with improving mortgage approval rates reported by major lenders
### Implications
The robust house price growth is reflective of several intertwined dynamics:
– **Stronger Domestic Demand:** Despite recent mortgage rate increases, resilient demand from first-time buyers and those seeking to upsize
– **Supply Constraints:** Low housing inventory continues to underpin price growth, with construction activity yet to fully recover to pre-2022 levels
– **Monetary Policy Impact:** Anticipated Bank of England (BoE) easing later in 2025 is prompting some buyers to act before lower rates potentially stoke further price gains
This degree of housing market resilience provides the UK economy with a layer of stability in the face of global uncertainty. Yet, for GBP/USD, the impact is proving insufficient to halt the currency’s slide.
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## GBP/USD Trends: Slide Continues Towards 1.31
With GBP/USD under pressure, currency traders are evaluating both the short-term and long-term factors contributing to the pound’s ongoing weakness.
### Recent GBP/USD Performance
– **Price Action:** The GBP/USD pair has declined steadily from September highs above 1.33, currently testing the 1.31 level
– **Volatility:** Elevated on intraday charts, as risk-on vs risk-off sentiment oscillates in response to both UK and US data releases
– **Comparative Strength:** GBP lagging G10 peers, with the US Dollar Index (DXY) regaining ground on safe haven inflows
### Contributing Factors
1. **Divergence in Central Bank Policy**
– The US Federal Reserve continues its cautious stance, keeping rates higher for longer to restrain inflation
– Bank of England signaling future rate cuts in 2025 as domestic growth slows and inflation comes under control
2. **Mixed UK Economic Data**
– Improved housing market figures contrast with tepid manufacturing output and lagging retail sales
– Labor market softness evident, with job vacancy declines and slower wage growth
3. **Political and Geopolitical Noise**
– Unresolved Brexit trade issues, especially regarding the Northern Ireland protocol and UK-EU trade flows
– External factors such as geopolitical tensions in the Middle East and Ukraine impacting safe haven flows into the US Dollar
4. **Market Technicals**
Read more on GBP/USD trading.