GBP Surges on UK Fiscal Discipline Pledges, BoE Rate Expectations Unchanged

The British Pound (GBP) has strengthened against the US Dollar (USD), reaching levels near 1.3550, following UK Chancellor John Healey's announcement of measures to encourage economic growth and attract private investment.

Healey unveiled plans to cut regulatory barriers, create testing freedoms for emerging technologies, and give city regions greater powers to attract investment. The Chancellor also pledged to curb rising costs for business and the public, aiming for a 25% reduction in regulatory costs by the next election in 2029.

The GBP/USD pair has received support following Healey's speech, which is seen as a significant move ahead of the upcoming October budget. However, strategists at Brown Brothers Harriman note that UK data is unlikely to shift Bank of England (BoE) rate expectations, citing the country's negative output gap and policy rate above the neutral range estimate.