Pound Slightly Gains as Traders Eye BoE Speech and Upcoming Budget

The pound experienced minor gains against a generally weaker dollar on Friday, rising by 0.1% despite business activity slowing. This comes as traders awaited key remarks from Bank of England Governor Andrew Bailey, and looked forward to the British finance minister Rachel Reeves' budget due in November.

Data from a recent PMI survey suggests that British business activity in September grew at its slowest pace in five months, weighing on the pound. Consumers and companies are hesitant to make large spending commitments, pending potential tax hikes in the upcoming budget.

Experts anticipate that Andrew Bailey may reinforce hawkish monetary policy sentiments in his upcoming speech. Market strategists, such as Ebury's Matthew Ryan, believe that persistent inflation pressures will likely prevent further rate cuts this year, despite traders speculating on unchanged rates at the November BoE meeting.

(With inputs from agencies.)