By Matthew Ryan, Head of Market Strategy of ebury.

Inflation in the UK was launched Last month at the highest level since January 2024, with households being hit hard by the increase in energy and water invoices, which came into force in April. However, even with the exception of the expected increase in energy prices, underlying inflation has also jumped to the highest level of the last twelve months, a fact at all encouraging. We believe that this is, at least in part, to the upward pressure on consumer prices caused by the government’s tax attack on businesses, which was also applied at the beginning of last month.

Today’s figures are essentially canceling the possibility of a new interest rate reduction in the United Kingdom for the coming months and will probably encourage the Bank of England to maintain its “tight” monetary guidance for some time. The new rise in inflation in services, which is far beyond estimates, is a special reason for the monetary policy committee, which will need to see much more progress in this area in order to feel confident in achieving its 2% goal in the near future. Indeed, Swaps markets do not fully discount the next reduction by 25 meters. only for the November meeting.

The pound has been significantly reinforced after the aforementioned announcements, reaching its highest level against the dollar for more than three years. With the Bank of England maintaining its “gradual” approach to interest rates and the Labor Party continuing to seek closer relations with the European Union, we estimate that the pound has the prerequisites to be one of the world’s best coins for 2025.