Sterling Weakens to 7-Month Low
The British pound fell toward $1.310, its weakest level since April, after Chancellor Rachel Reeves’ speech signaling upcoming tax hikes, while investors awaited Thursday’s Bank of England meeting.
Markets now see about a one-in-three chance of a 25-basis-point rate cut this week, up from near zero after softer inflation and other weak economic data, while odds of a cut by December have risen to two-in-three.
Reeves, preparing to unveil her budget on November 26, said the UK has endured “years of economic mismanagement” and stressed that fiscal discipline would be central to her plan. She pledged an “iron-clad” commitment to fiscal rules, a message aimed at reassuring investors amid concerns about the size of the fiscal gap.
Her comments reinforced expectations of tighter fiscal policy, even as monetary policy may soon ease, weighing further on the pound ahead of the BoE’s closely watched rate decision.
Source : Tradingeconomics.com
