British pound falls to three-month low amid strong dollar

The British pound continued its decline, reaching $1.28, a three-month low, as the stronger US dollar weighed on its value.

British pound falls to three-month low amid strong dollar

This was driven by expectations that policies under Donald Trump could increase inflation and limit the Federal Reserve's ability to lower borrowing costs. Recent labor market data in the UK reinforced the Bank of England's cautious approach toward rate cuts. Regular pay, excluding bonuses, eased slightly to 4.8% for the three months ending in September, in line with the central bank’s forecast. Including bonuses and total pay accelerated. However, unemployment rose to 4.3%, and job vacancies fell to their lowest level since May 2021.

UK labor market data supports Bank of England’s cautious rate cut stance

Last week, the Bank of England implemented its second 25bps rate cut of the year and maintained a cautious outlook for further reductions. Critical UK economic data, including Q3 GDP growth figures, are expected this week.