**GBP/USD Crashes Below 1.35 as Growth Data and Tariffs Trigger New Wave of Selling**
*By [TradingNews.com](https://www.tradingnews.com/news/gbp-usd-crashes-below-1-35-as-growth-sata-and-tariffs-trigger-new-wave-selling)*
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The foreign exchange market faced intense volatility as GBP/USD plunged below the psychologically significant 1.35 handle. The decline came amid discouraging UK growth data coupled with a fresh round of tariffs imposed by both the UK and other major economies, triggering a new wave of selling in the already pressured British Pound.
### Downward Pressure Mounts on GBP/USD
The GBP/USD currency pair, one of the most heavily traded pairs in the forex market, has come under sustained downward pressure. The breach of the 1.35 level marks a significant technical and psychological milestone, spurring further selling from major market participants. In recent sessions, bears have dominated, with aggressive profit-taking and risk-off flows contributing to the steep drop.
#### Key Catalysts for the Crash
Multiple catalysts have converged to send GBP/USD spiraling downward. These include:
– **Worse-Than-Expected UK Economic Growth Data:**
Newly released sets of economic statistics revealed that UK GDP growth stalled more sharply than economists had anticipated. The slowdown has heightened concerns about the health of the British economy just as persistent inflation and policy uncertainty threaten future prospects.
– **Tariff Escalations:**
Fresh announcements of import tariffs, both from the UK and retaliatory measures by leading trading partners, have rattled investor confidence. These protectionist measures, introduced in response to ongoing trade disputes, raise fears of reduced trade volumes and further domestic economic pain.
– **Dovish Bank of England Signals:**
Despite sticky inflation, the Bank of England’s recent policy communications have skewed dovish, with policymakers expressing concerns about the fragility of the recovery. Markets now expect a slower pace of rate hikes or even a possible halt to monetary tightening if growth continues to falter.
– **Global Risk-Off Sentiment:**
Broader risk sentiment has deteriorated as global investors seek safe-haven assets, pulling capital away from riskier currencies like the British Pound. This comes amid rising geopolitical tension and ongoing uncertainty surrounding global supply chains.
### Economic Data – Growth Sputters
The UK Office for National Statistics published fresh data indicating that GDP growth figures undershot analyst expectations for the past quarter. The main takeaways include:
– **GDP rose only 0.1% quarter-on-quarter, versus expectations of 0.3%.**
– **Industrial production dropped by 0.4%.**
– **Services sector growth, a key pillar of the UK economy, was flat.**
These disappointing numbers have heightened fears of stagflation—a toxic mix of stagnating growth and high inflation—further eroding investor confidence in sterling-denominated assets.
#### Impact on the Pound
– Sterling immediately fell by more than 1% against the dollar after the data release.
– International investors have slashed their holdings of UK assets, as future returns look increasingly uncertain.
– The weak data feeds concerns that upcoming revisions may be even more negative than currently forecast.
### The Tariff Effect – Trade Disrupted
The competitive position of the UK was further undermined by the institution of new tariffs:
– **UK Government Announced Import Tariffs on Select Overseas Goods:**
Ostensibly aimed at supporting domestic industries, these new duties risk provoking retaliatory action from trading partners such as the EU and the US.
– **Retaliatory Measures Hurt Exporters:**
Key UK exports—especially in the automotive, food and beverage, and aviation sectors—are now subject to higher tariffs abroad, threatening jobs and future investment.
– **Market Reaction:**
– Export-oriented UK companies saw share prices tumble on the news.
– Forward contracts point to expectations of lasting disruption throughout 202
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