UK pound rises slightly on budget signals, but concerns linger over sustainability and rate cuts.

The UK pound rose slightly in late November amid mixed signals from Chancellor Rachel Reeves' 2025 budget, which included £26bn in future tax hikes to fund welfare and signal fiscal discipline. While the currency gained 0.85% for the week, reaching $1.3202, analysts called the move a relief rally rather than a sustained trend, with markets already pricing in most budget details. Concerns remain over long-term fiscal sustainability, political uncertainty, and expectations of a December Bank of England rate cut. The pound held steady against the euro, with conflicting forecasts from major banks, while gilt yields stayed near 4.45%.