HSBC: The pound will continue to face resistance from the possibility of a weak economy and long-term fiscal challenges.

HSBC foreign exchange strategist Nick Andrews stated in a report that the British pound will continue to face resistance due to the possible weakness in UK economic growth and long-term fiscal challenges. Data released on Thursday showed that the UK economy grew by 0.3% in the second quarter, exceeding expectations. Andrews said that the Bank of England may pause or lower interest rates, which could support the pound in the short term. "However, if the Bank of England successfully controls inflation, it could result in higher unemployment rates than currently forecast and a slowdown in economic growth." He added that expectations of fiscal austerity and the government's autumn budget could also put pressure on the pound. The pound fell 0.39% to $1.3521. The euro fell 0.21% to 0.8601 pounds.