Sterling climbed to around $1.35 this week as investor anxiety over UK fiscal policy eased and comments on closer UK–EU alignment improved sentiment. A firmer global risk tone and higher UK yields supported the pound, while intermittent USD strength and upcoming macro releases kept traders cautious. Key drivers include a retreat in budget-related risk, Prime Minister-level remarks on EU ties, and U.S. data-driven dollar moves—catalysts that will shape GBP direction into mid-January.

Sterling rose late in the week as Bank of England easing expectations met a softer dollar. GBP/USD pushed above $1.35 while GBP/EUR lagged, reflecting divergent regional forces, inflation trends and positioning ahead of 2026 rate moves.

A Bank of England 25bp cut to 3.75% — delivered with a cautious, hawkish tone — and growing expectations of US easing pushed sterling higher last week. GBP/USD climbed toward $1.35–1.353 while GBP/EUR strengthened near €0.872. The move reflects monetary-policy nuance, weaker US data, and immediate corporate FX effects on importers and exporters.

A surprise fall in UK inflation to 3.2% has pushed sterling lower and pushed expectations that the Bank of England will cut its policy rate imminently. This article explains the data, how gilt yields and FX reacted, and what traders and borrowers should watch next.

Sterling strengthened after the UK Budget and better-than-expected PMI revisions, lifting GBP toward a five-week high. Market pricing and a BoE institutional overhaul increased expectations of an imminent Bank of England rate cut. This article summarizes the key drivers, data points and practical FX implications for traders, including technical levels and risk-management suggestions.

Stronger-than-expected UK PMI, US dollar weakness and shifting rate expectations drove the pound higher in early December 2025. Concrete data—PMI, retail prices, OECD forecasts—and political developments shaped near-term GBP moves and market pricing ahead of BoE guidance.