The British pound experienced a slight decrease during Monday trading because investors anticipated multiple economic data releases while monitoring potential U.S. tariff decisions that could disrupt worldwide trade systems.
Sterling dropped 0.3% to $1.3601 while maintaining its position near the highest level since late 2021. The currency maintained stability at 86.23 pence against the euro. The political instability caused by Labour’s decision to abandon welfare cuts created uncertainty about Chancellor Rachel Reeves’ fiscal path.
The UK housing market experienced no price changes during June after April introduced new property tax increases. The housing market shows signs of recovery because of better mortgage lending and the Bank of England’s dovish monetary policy which has lowered interest rates four times since last year.
The upcoming week will bring GDP data which will provide clearer insights into economic performance. BoE policymaker Alan Taylor advocated for immediate interest rate cuts because he believes this approach will prevent more aggressive monetary policy adjustments later in 2026.
The world waits for Wednesday to determine which countries will reach tariff agreements with the U.S. to prevent increased trade restrictions. The UK received an exemption in May but maintains negotiations to eliminate current 25% metals tariffs which have driven the pound to increase by 2% since then.
