GBP Slips Against AUD Amid RBA Rate Hike Expectations

The British pound has come under pressure against the Australian dollar as markets increasingly expect the Reserve Bank of Australia to raise interest rates again.

Australia's latest growth figures have strengthened the case for further tightening in the country, with the economy expanding 0.4% in the second quarter and 2.1% from a year earlier, beating expectations.

The data has increased expectations that the RBA may need to do more to bring inflation under control, with underlying inflation of 3.6%. Markets are now pricing a roughly two-thirds chance of a September hike, with a 25-basis-point increase fully priced by November.

The UK faces similar inflation concerns, but the Bank of England is more divided on what to do next. Consumer price inflation rose to 2.9% in July, above the BoE's 2% target, while higher energy costs could push prices higher again later this year.