<\/p>\n\n\n\n
The British pound<\/strong> weakened on Wednesday<\/strong>, falling against both the U.S. dollar<\/strong> and the euro<\/strong>, after official data showed that U.K. inflation<\/strong> unexpectedly held steady in September<\/strong>, rather than rising as markets had anticipated.<\/p>\n\n\n\n The Consumer Price Index (CPI)<\/strong> remained at 3.8%<\/strong> for the third consecutive month, according to the Office for National Statistics (ONS)<\/strong> \u2014 below the 4.0%<\/strong> increase expected by analysts and the Bank of England (BoE)<\/strong>.<\/p>\n\n\n\n Following the data, the pound fell 0.4% to $1.3323<\/strong>, marking its biggest single-day loss in nearly two weeks<\/strong>, as traders ramped up expectations for BoE rate cuts<\/strong> later this year. The core inflation<\/strong> measure\u2014excluding volatile food and energy components\u2014also came in weaker than forecasts, while services inflation<\/strong> undershot projections as well. According to interest rate futures<\/strong>, traders now see a 75% probability<\/strong> that the BoE will cut rates to 3.75% by December<\/strong>, up sharply from about 46%<\/strong> before the inflation report.<\/p>\n\n\n\n Despite the softer inflation data, investor sentiment toward sterling<\/strong> remains cautious ahead of the autumn budget<\/strong> scheduled for next month<\/strong>. Figures released on Tuesday showed that government borrowing<\/strong> in the first half of the fiscal year<\/strong> reached its highest level on record outside the pandemic<\/strong>, intensifying pressure on Reeves to close a \u00a340 billion shortfall<\/strong> while maintaining her fiscal credibility.<\/p>\n\n\n\n The combination of easing inflation<\/strong>, mounting fiscal concerns<\/strong>, and renewed BoE dovish expectations<\/strong> has left the pound vulnerable to further declines. The British pound weakened on Wednesday, falling against both the U.S. dollar and the euro, after official data showed that U.K. inflation unexpectedly held steady in September, rather than rising as markets had anticipated. The Consumer Price Index (CPI) remained at 3.8% for the third consecutive month, according to the Office for National Statistics (ONS) …<\/p>\n","protected":false},"author":9,"featured_media":54454,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[37,36],"tags":[],"class_list":["post-120226","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-forex-markets","category-market-updates"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/120226","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=120226"}],"version-history":[{"count":1,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/120226\/revisions"}],"predecessor-version":[{"id":120227,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/120226\/revisions\/120227"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/54454"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=120226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=120226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=120226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Sterling Drops on Softer Inflation Outlook<\/strong><\/h3>\n\n\n\n
Against the euro<\/strong>, sterling also slipped 0.4% to 87.05 pence<\/strong>, as currency markets priced in a more dovish policy path from the central bank.<\/p>\n\n\n\n
These signs of cooling price pressures bolstered expectations that the Monetary Policy Committee (MPC)<\/strong> could lower the Bank Rate<\/strong> sooner than previously anticipated.<\/p>\n\n\n\nFiscal Concerns Keep Pressure on Sterling<\/strong><\/h3>\n\n\n\n
Markets are bracing for possible tax hikes and spending cuts<\/strong>, as Finance Minister Rachel Reeves<\/strong> faces growing fiscal constraints.<\/p>\n\n\n\nMarket Outlook<\/strong><\/h3>\n\n\n\n
Analysts suggest that if Friday\u2019s U.K. retail sales<\/strong> and upcoming U.S. CPI data<\/strong> reinforce a widening policy divergence between the BoE<\/strong> and the Federal Reserve<\/strong>, sterling could test lower support levels near $1.3250<\/strong> in the short term.<\/p>\n","protected":false},"excerpt":{"rendered":"