Pound Hits New Lows as UK Economy Slows and Energy Crisis Looms

The British pound has plummeted to its lowest level since early July, hitting the first bearish target of $1.3300 and potentially on track for further decline.

The UK's economic momentum is slowing down, with purchasing managers' indices falling to a three-month low in September. The US, by contrast, saw its PMI soar to its highest level since 2021, supporting the strong dollar.

Bank of England Governor Andrew Bailey warned that higher energy prices had not yet fed through into core inflation, but he cautioned that a further escalation of the Middle East conflict could change this dynamic and prompt tighter monetary policy.