The British pound experienced a decline, falling below $1.29 to a near two-week low, driven by disappointing February inflation data and reactions to the Spring Statement. Revised economic forecasts contributed to the downward pressure on the currency.
- The British pound slipped below $1.29.
- February inflation reading was weaker than expected.
- UK inflation is expected to average 3.2% in 2025, up from 2.6% projected in October.
- 2025 growth forecast was lowered to 1% from 2%.
- Projected public sector net borrowing is expected to decline to £74.0 billion by 2029-30.
- Borrowing for 2025-26 is expected to be £12.1 billion higher than October estimates.
- The UK’s annual inflation rate eased to 2.8% in February.
The British pound is facing downward pressure due to a combination of factors. Higher inflation forecasts and lowered growth expectations paint a less optimistic picture for the UK economy. Increased borrowing estimates also contribute to the negative sentiment surrounding the currency. While the government has announced measures to address the budget, the immediate impact appears to be weighing on investor confidence in the pound.