The British pound experienced a modest increase against the dollar, reaching $1.347, spurred by positive survey data indicating a strong month for UK businesses. Despite a recent high inflation report, the pound’s initial reaction was limited, as analysts attributed the inflation rise primarily to airfare increases rather than widespread price pressures. Market expectations for Bank of England policy suggest a reduced likelihood of near-term rate cuts.
- The British pound rose to $1.347.
- UK businesses experienced their strongest month in a year, driven by the services sector.
- Inflation increase attributed to higher airfares.
- The Bank of England’s policy path is unlikely to change significantly.
- Money markets see less than a 50% chance of a rate cut before end-2025.
- A quarter-point reduction this year has a 36% probability.
- Next cut likely priced in for spring 2026.
- Sterling has risen nearly 8% against the dollar in 2025.
Overall, the British pound is exhibiting resilience. Positive economic data is supporting its value, while tempered inflation concerns and expectations of a stable monetary policy are contributing to market confidence. The reduced anticipation of near-term rate cuts suggests a potentially stronger outlook for the pound in the coming months.