FX.co ★ Pound Holds Near One-Month High Helped by Strong PMI Data

The pound traded just below $1.34, holding near a one-month high as investors weighed a mixed set of economic indicators ahead of next week’s budget and the Bank of England’s November 5 policy meeting. Flash PMI data showed UK private-sector activity growing at its fastest pace since February, with both manufacturing and services beating expectations. In contrast, September retail sales declined more sharply than forecast, and consumer confidence saw its steepest monthly drop since the pandemic, underscoring sustained cost-of-living pressures and anxiety over the Middle East conflict. Stronger-than-expected inflation figures earlier this week led markets to reinforce expectations of further monetary tightening, with at least three quarter-point rate increases now priced in by April 2027 and the first potentially coming as soon as November 5. Investors are also focused on next week’s budget, where Chancellor John Healey is expected to stress fiscal discipline.