The British pound slipped to $1.333, weighed down by a stronger US dollar and investor caution ahead of the UK’s November budget. Markets are concerned that potential tax hikes aimed at meeting fiscal goals could further strain the fragile UK economy. Finance Minister Rachel Reeves is expected to emphasize fiscal discipline in her November 26 budget, possibly through higher taxes, following her earlier £25 billion increase in employer social contributions. Analysts foresee modest growth for the rest of 2025, with inflation projected to reach 4%, twice the Bank of England’s target. Investors are closely watching upcoming UK data on employment, wages, and GDP to gauge the outlook for interest rates. The BoE meets next on November 6, with markets expecting no rate change and the first cut no earlier than March. Persistent inflation in wages and services remains a challenge. Meanwhile, the dollar strengthened after President Trump softened his tariff stance toward Beijing.
