British Pound Rises as U.S. Government Reopens and Confidence Returns

The British pound strengthened on Thursday, reaching its highest level in two weeks as global markets reacted positively to the reopening of the U.S. government. The end of the budget standoff in Washington restored a sense of stability after weeks of uncertainty, boosting investor confidence and easing fears of wider economic disruption.

The decision to reopen the government also means that key U.S. economic data, delayed by the shutdown, can now be released—allowing analysts and policymakers to assess the country’s true economic health. The move has lifted sentiment across global markets, where investors had been on edge amid the political deadlock.

In the United Kingdom, however, economic figures painted a more fragile picture. Official data showed that the economy shrank slightly in September, suggesting that growth remains weak. Over the past year, Britain’s expansion has slowed considerably, reflecting the lingering effects of high prices, global uncertainty, and cautious consumer spending.

The disappointing figures have fueled talk that the Bank of England may soon lower interest rates to support growth. Many observers believe that policymakers are preparing to ease borrowing costs, as signs of slowing activity become harder to ignore.

At the same time, political tensions in London are creating unease. Reports of divisions within the government and growing pressure on Prime Minister Keir Starmer have raised questions about the country’s political stability. Any further signs of internal strain could weigh on investor sentiment and make it harder for the U.K. to attract fresh capital.

Despite these domestic challenges, the pound’s strength this week reflects relief that the U.S. has avoided a deeper crisis. The reopening of the world’s largest economy has helped restore global confidence and encouraged investors to take on more risk. The dollar, which had gained during the shutdown as a safe haven, weakened slightly as calm returned to the markets.

Still, many analysts caution that this sense of stability may be temporary. Both the U.S. and U.K. face serious tests in the months ahead—from political divisions to fragile economic recoveries—and the global outlook remains uncertain.

For now, though, investors appear to be breathing easier. The reopening of the U.S. government has offered a moment of relief, lifting global sentiment and giving the pound a welcome boost after weeks of tension and volatility.