GBP Finds Support Amidst Inflation Risks Skewed to Upside

The British pound has found some support this week after holding above $1.35 against the dollar.

Gilt markets have stabilized following last week's sell-off, which was partly attributed to the reassuring tone of John Healey's first major speech as Chancellor on Monday.

Healey emphasized fiscal discipline and adherence to fiscal rules, bringing a measure of calm back to proceedings ahead of next month's budget.

The pound also received a boost from hawkish comments by Bank of England Governor Andrew Bailey, who noted that inflation risks were 'skewed to the upside' due to hostilities in the Middle East and already feeding through to financial markets.