Pound Hits Three-Month High Ahead of Crucial UK Economic Data
The British pound has strengthened to its highest level in over three months, reaching around $1.355 as investors position ahead of a busy week of UK economic data.
Markets are focused on upcoming labour market figures due on Tuesday, followed by inflation data on Wednesday, which is expected to show headlining inflation accelerating to a four-month high, although the core rate may ease.
The Bank of England (BoE) has left rates unchanged in July, with Governor Andrew Bailey stating that the disinflation process remains on track despite persistent external risks, such as the prolonged conflict in the Middle East keeping energy prices elevated and adding to inflationary pressures.
Markets are currently fully pricing in a 25-basis-point BoE rate increase in December, with further moves dependent on the inflation trajectory. Expectations for a September Federal Reserve rate hike continue to decline.