Sterling Weighed Down by Dismal Consumer Sentiment and UK Borrowing Figures

The UK pound (GBP) struggled to gain momentum on Tuesday following fresh data that revealed consumer confidence had hit its weakest level in three years. The S&P Global consumer sentiment index dropped to 42.7 in September, with households increasingly concerned about higher interest rates and tax increases.

The latest UK government borrowing figures showed a wider-than-anticipated deficit, further reducing the fiscal room available ahead of the upcoming budget. This has added pressure on sterling, which could face additional stress today if the Eurozone consumer confidence figures indicate another deterioration in household sentiment.