The British pound gained ground, approaching $1.26, as the dollar weakened following Donald Trump’s announcement that he plans to nominate hedge fund manager Scott Bessent as Treasury Secretary.
Pound gains ground
This decision provided some relief and a sense of stability to investors, as Bessent is expected to focus on political stability and alleviate concerns over widespread tariffs. However, the pound remains near six-month lows, with disappointing economic data fueling expectations of potential rate cuts by the Bank of England. Retail sales dropped by a larger-than-expected 0.7% in October, and flash PMIs came in below forecasts, indicating a slight decline in business activity in November.
UK inflation figures
Meanwhile, the UK’s annual inflation rate rose to 2.3% in October, the highest in six months, up from 1.7% in September, surpassing both the Bank of England's target and market expectations of 2.2%. Most analysts predict that the Bank of England will keep borrowing costs unchanged in December.
