The British pound is headed toward a two-month high on Monday ahead of the UK government’s interim budget update to be delivered by Finance Minister Jeremy Hunt later in the week.
Prime Minister Rishi Sunak stated that his government would cut taxes after a further decline in inflation. “Speculation over tax cuts has centered on inheritance tax and perhaps even income tax and national insurance, which would favor workers at the lower end of the income spectrum,” ING strategist Chris Turner observed, adding that the firm expects the Bank of England to lower its interest rates starting next month as inflation continues to cool.
The pound rose 0.1% against the US dollar to $1.2475, having risen earlier in the session by 0.39% to $1.2511; its highest level since September 13. The euro rose 0.1% against the pound to 87.61 pence, retreating from the 87.70 achieved earlier in the day; its highest level since May.
