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Pound rallies face risk from October 28 budget-driven dovish repricing
BBH said GBP strength has been supported by an upward revision to UK Q2 GDP, but investors are now focused on the October 28 Autumn Budget, where expected tax hikes and spending cuts could reduce pressure for BOE rate increases.
FXStreet, citing BBH strategist Elias Haddad, said the British pound has risen as an upward revision to UK Q2 GDP supported the currency, with growth beating prior estimates and Bank of England forecasts.
Still, Haddad warned that market attention is shifting to the October 28 Autumn Budget, where expected tax hikes and spending cuts could lessen the need for further BOE rate increases and leave GBP exposed to a more dovish repricing of monetary policy.