The British pound edged higher on Tuesday but is set for monthly losses against both the euro and U.S. dollar, pressured by concerns over a possible U.S. government shutdown and weak UK data.
Britain's economy grew 0.3% in April–June, while the current account deficit rose to £28.9 billion (US$38.8 billion), equal to 3.8% of GDP. Despite this, the pound traded at US$1.34505, down 0.5% against the dollar and 0.9% against the euro this month.
High borrowing costs and inflation have intensified expectations that Finance Minister Rachel Reeves will raise taxes in the November 26 budget to address a large fiscal gap. Reeves has ruled out increases to VAT, national insurance, and income tax rates, but said other measures are being considered.
Source: Reuters