Sterling slipped to $1.336, hovering near its lowest level since late July, as rising oil prices and weaker-than-expected UK public finances undermined investor confidence. At the same time, the US dollar remained firm, supported by expectations of further interest rate increases from the Federal Reserve.
Brent crude advanced towards $102 a barrel, poised to break a four-session losing streak, amid uncertainty over global oil supply and the prospects for renewed Middle East diplomacy. President Donald Trump is scheduled to address the UN General Assembly later today and may meet his Iranian counterpart on the sidelines.
UK government figures showed the budget deficit widened to £18.3 billion in August, surpassing the £15.5 billion consensus forecast, in part due to higher inflation-linked spending on pensions and welfare benefits. Market attention is now shifting to next month’s Autumn Budget, with reports suggesting the government is considering removing infrastructure borrowing from its existing fiscal rules.
