• EUR/GBP consolidates gains near 0.8615 as UK economic data disappoints

• May GDP shows unexpected 0.1% contraction,ethereum wallet address marking second consecutive monthly decline

• Industrial production figures compound sterling's weakness amid dovish BoE expectations

The currency pair continues to find support above the psychological 0.8600 level during Friday's European session, building on overnight gains. Sterling's weakness follows the release of concerning economic indicators from the Office for National Statistics, which revealed broader economic challenges than analysts had anticipated.

Detailed breakdowns show the UK economy contracted 0.1% month-over-month in May, defying consensus forecasts that predicted modest 0.1% growth. This follows April's 0.3% decline, marking the first back-to-back monthly contractions since early 2023. The services sector underperformed particularly badly, declining 0.2% after showing resilience earlier in the year.

Manufacturing output disappointed with a 1.2% monthly drop, while construction activity unexpectedly grew 1.9%. The mixed sectoral performance suggests structural weaknesses in the UK's service-dominated economy are becoming more pronounced. Market participants now price in greater probability of aggressive monetary easing from Threadneedle Street in coming quarters.

Industrial production figures compounded sterling's woes, registering a 0.9% monthly decline versus expectations of stabilization. The three-month rolling average now shows production down 0.7%, reflecting persistent challenges in Britain's industrial base. These developments have prompted several investment banks to revise their GBP forecasts downward.

Across the Channel, the euro maintains relative strength despite emerging trade tensions. The single currency shows resilience even as Washington prepares new tariff measures targeting European exporters. Market participants appear to be pricing in limited immediate impact on Eurozone growth, though analysts warn this could change if retaliatory measures escalate.

Currency strategists note that EUR/GBP's technical picture suggests potential for further upside, with the pair having broken through several key resistance levels this week. However, they caution that positioning data shows speculative accounts remain heavily long euros, which could limit near-term appreciation potential absent fresh catalysts.