FX.co ★ Sterling Weakens Slightly

The British pound fell to $1.333, impacted by a stronger US dollar and investor caution in anticipation of the UK's November budget announcement. Concerns are mounting in the markets about potential tax hikes intended to meet fiscal objectives, which could further pressure the delicate UK economy. Finance Minister Rachel Reeves is anticipated to stress fiscal responsibility in her budget presentation on November 26, possibly by introducing higher taxes. This follows her prior decision to increase employer social contributions by £25 billion. Analysts predict modest economic growth for the remainder of 2025, with inflation expected to hit 4%, double the Bank of England’s target. Investors are closely monitoring upcoming UK data on employment, wages, and GDP to assess future interest rate trends. The Bank of England is scheduled to meet on November 6, with market expectations leaning towards no changes in the rate and anticipating the first cut no earlier than March. Consistent inflation in wages and services continues to pose a challenge. Meanwhile, the US dollar gained strength after President Trump eased his tariff position toward Beijing.