Pound Tumbles as Aussie Rate Hikes Gain Momentum

The British pound has come under pressure against the Australian dollar due to expectations of further interest rate hikes in Australia. The Reserve Bank of Australia (RBA) is likely to raise rates again, driven by stubborn inflation and stronger economic data.

Australia's latest growth figures showed a 0.4% expansion in the second quarter and 2.1% from a year earlier, beating expectations. This has increased the likelihood of a September rate hike, with markets pricing a roughly two-thirds chance.

The UK faces similar inflation concerns, but the Bank of England (BoE) is more divided on what to do next. BoE Chief Economist Huw Pill argues that higher rates may be needed to prevent inflation from lasting longer.