The pound achieved its highest value against the US dollar in three years, closing at $1.3468 on Friday. This 1.5% increase is attributed to rising UK retail sales and investor hesitance towards US financial assets. Experts warn that ongoing uncertainty about UK government control over public spending plays a significant role in market perceptions. Notably, Kathleen Brooks of XTB pointed out that volatility in the bond market could once again dictate UK fiscal policy as it has in the past, suggesting a sensitive economic landscape ahead.
On Friday, the pound traded at its highest in three years amidst rising UK retail sales and investor unease with US assets.
The pound reached a high of $1.3468, marking a 1.5% gain, driven by market caution over UK public spending control.
Kathleen Brooks emphasized that market wariness over UK lending arises from uncontrolled public spending, despite factors like the declining energy price cap.
Brooks warned that historical patterns show the bond market could influence UK fiscal policy amidst current volatility.
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