U.K. Fiscal Risks May Soon Begin to Weigh on Sterling
Monex Europe analysts see potential pressure on sterling before the U.K. budget on Oct. 28, while markets await Wednesday’s U.S. inflation data.
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what happened
Fiscal concerns in the U.K. could soon become a drag on sterling, even as the currency remains resilient ahead of the budget scheduled for Oct. 28. Dow Jones Newswires reported that Monex Europe analysts urged traders to turn their attention back to the budget as the week advances. They see particular pressure on the pound against the euro, which could stabilize if Wednesday’s U.S. inflation figures match expectations.
The Institute for Fiscal Studies cautioned that U.K. Treasury chief John Healey risks producing a “work of fiction” unless he addresses a 35 billion-pound gap in the government’s spending plans. Sterling is up 0.1% at $1.3235, while the euro is down 0.1% at 0.8451 pounds. Expectations that the Bank of England may raise interest rates next month are supporting the British currency.
why it matters
The U.K. budget and U.S. inflation report could shape trading in GBP/USD and EUR/GBP. Expectations for a Bank of England rate increase are currently providing sterling with some support despite fiscal concerns.
instruments
sources
- U.K. Budget Risks Could Start to Weigh on Sterling Soon — Market Talk — Dow Jones Newswires, 12 October 2026 at 09:38 UTC
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