London Daily

Focus on the big picture.
Saturday, May 10, 2025

Pound reaches high not seen since mid-August

Pound reaches high not seen since mid-August

A weakened dollar has led to a more valuable pound as officials at the US Federal reserve signal support for slowing interest rate rises.
A pound could buy $1.21 on Thursday morning, the highest amount since mid-August, making imports cheaper for UK companies and consumers.

The 20 cents rise in sterling buying power from an all-time low in the days following the September mini-budget and the associated market upset, is due to dollar weakness rather than pound strength.

The three-month high follows news from the US interest rate-setting Federal Reserve, known as the Fed, that the majority of its members wish to slow the pace of interest rate rises.

Rates had been continuously hiked by the Fed in an effort to reduce inflation to its 2% target but US inflation stood at 7.7% in the year up to November.

A stronger pound is good news for businesses and consumers and could help lower inflation as importing goods, such as food and petrol, becomes cheaper.

While sterling held its gains throughout the morning, the pound is still down against the dollar this year. Pound value peaked against the dollar in mid-January this year when £1 bought $1.37.

Higher pound values can also be a measure of economic confidence and financial stability and so the pound dropped in value after the now revoked, mini-budget plan of unfunded tax cuts and spending.

US markets are closed for Thanksgiving so broader market reaction to the Fed's interest rate position is not clear.

Interest rates have been rising across the world as countries grapple with inflation from rising energy costs, caused by Russia's invasion of Ukraine, and supply chain issues stemming from COVID-19 lockdowns.

Similar to the Fed, whose views were known through the release of meeting minutes, the interest rate-setting body for the Eurozone, the European Central Bank (ECB) on Thursday released minutes of its meetings.

But contrary to the Fed, the ECB said it feared that inflation may be getting entrenched, records of their last policy meeting showed. As a result, rates would need to rise further, the accounts of the 26 and 27 October meeting showed.

"It was also clear that rates would need to be raised further to reach a level that would deliver on the ECB's 2% medium-term target," the meeting notes showed.

The pound is at a month-high against the euro and can buy €1.16.
Newsletter

Related Articles

0:00
0:00
Close
Cardinal Robert Prevost Elected as Pope Leo XIV, Marking a Historic Papacy
Newark Mayor Ras Baraka Arrested at ICE Facility Amid Congressional Visit
India-Pakistan conflict may be first test for Chinese military tech
Bill Gates Announces Plan to Wind Down Philanthropic Foundation and Disperse Wealth
Historic Papal Conclave Set to Commence in Rome
Huge Copper, Gold, and Silver Discovery in Argentina and Chile — But the Profits Go Abroad
Prince Harry is pleading for reconciliation — but the royals are just as sick of his victimhood as everyone else
The Road to Freedom: She Protested Putin, Escaped House Arrest, and Survived a 2,800-Kilometer Journey
OpenAI's Flip-Flop: No Longer Going Commercial, Back to Nonprofit, After Musk Lawsuit and Backlash
“Trump Supporter” Aims to Bring a MAGA-Style Shift to Romania
First From China: Zhao Xintong Wins the Snooker World Championship
Nvidia Faces Billion-Dollar Losses – Warns: China Is on Its Way to Becoming an AI Superpower
Trump Rules Out Third Term, Names JD Vance and Marco Rubio as Potential Successors
Mexico Says ‘No’ to U.S. Troops: President Sheinbaum Rejects Trump’s Offer to Fight Cartels
Nigel Farage’s Reform UK Storms the Map, Wrecking the Two-Party Monopoly
DOGE: Reimagining Government Operations with AI
Common Sense Returns to Britain's Legal System: UK Supreme Court Declares a Woman Is… a Woman
Beijing Says U.S. Is ‘Reaching Out’ for Tariff Talks Amid Soaring Trade Tensions
U.K. Court Rejects Prince Harry’s Final Appeal Over Police Security
Prince Harry’s Heartfelt Outburst Rocks the Royal Family
Trump Shares AI-Generated Image of Himself as… Pope, Prompting Outrage Reaction
Transgender Swimmer Secures Five Gold Medals at U.S. Masters Championship
Prince Harry: “I Want Reconciliation with My Family”
Germany's Alternative für Deutschland (AfD) party has now been officially labeled “right-wing extremist” by the federal office for the so-called “protection of the constitution.”
Amazon Launches Satellite Internet Service Amidst Competition with SpaceX
Transformative Changes in Women's Wrestling: The Rise of WWE Superstars
The Rush to the White Gold: Global Investment Surge in Natural Hydrogen Exploration
This is a day in Spain without electricity and internet
Reform UK Surprises in British Elections, Challenging Traditional Two-Party System
180-Year-Old Christian University in South Carolina Announces Closure Due to Unmet $6 Million Fundraising Goal
Brazilian Woman Jailed for Fourteen Years for Writing “You Lost, Idiot” on Statue During Protest
Trump Administration Removes National Security Adviser Mike Waltz Amid Signal Chat Controversy
Dutch Politician Eva Vlaardingerbroek Receives Spyware Threat Alert from Apple
Paramount Board Considers Settlement in Trump’s $20 Billion Lawsuit Over "60 Minutes" Interview
U.S. Economy Shrink in Trump’s First Quarter as Tariff Policy Raises Questions
Deadline Looms for RTS Meter Replacement: Hundreds of Thousands at Risk of Heating Disruption
Sweden Grapples with Deadly Gun Violence: Suspect Arrested After Three Young Men Killed in Uppsala Hair Salon
Walz Reveals Why Harris Chose Him as Her Running Mate and Reflects on Democratic Losses
Spain Restores Power After Unprecedented Nationwide Blackout
Carney Secures Liberal Mandate in Canada’s Federal Election
Death Penalty Sought as Luigi Manion Pleads Not Guilty in CEO Murder Case
President Trump contacts Jeff Bezos after reports of Amazon considering listing tariff surcharges; company clarifies no such plan for main platform
Spain and Portugal Recover from Massive Blackout
Liverpool Clinches Record-Equalling 20th English League Title Under Arne Slot
Singapore Politicians Warn Against Foreign Interference in Election
Driver Ploughs into Vancouver Festival Crowd, Killing Nine
Depression, Fear of Defamation, and a Tragic End: New Details on Virginia Giuffre’s Suicide
“Sharia for UK, Allah Akbar!”
Massive Explosion at Iran's Bandar Abbas Port Linked to Suspicious Chemical Shipments
Incident Reflection: A Harsh Reality Check
×