The British pound experienced a modest gain against the dollar, reaching $1.347. This uptick follows positive survey data indicating a strong performance in the UK business sector, particularly within the services industry, over the past month. Despite recent inflation figures, which had a limited impact on sterling due to being driven by specific factors such as airfares, expectations regarding the Bank of England’s monetary policy remain largely unchanged.
- The British pound gained to $1.347.
- UK businesses experienced their strongest month in a year.
- The services sector drove the business rebound.
- Recent inflation print had a limited impact on sterling.
- The inflation rise largely reflected higher airfares.
- Money markets see less than a 50% chance of a rate cut before end-2025.
- There’s a 36% probability of a quarter-point reduction this year and the next.
- The next cut is likely priced in for spring 2026.
- Sterling has risen nearly 8% against the dollar in 2025.
The asset’s recent performance suggests a complex interplay of factors. While positive economic indicators, such as the rebound in the business sector, provide support, inflation concerns and expectations surrounding monetary policy decisions introduce uncertainty. The modest gain indicates underlying strength, but the limited reaction to inflation and delayed expectations for interest rate cuts suggest that substantial near-term appreciation may be tempered.