Traders Bet Big Against Pound, Signaling Uncertainty
Update: 2025-12-20
Description
Traders are placing record bets against the British pound, anticipating a drop in value due to Rachel Reeves recent Budget. The pound has recovered to $1.34, but short positions indicate traders expect it to fall again soon. The Bank of England has cut rates six times since summer 2022, and experts warn of potential political drama and shaky public finances. Reeves tax hikes have contributed to a five-year high unemployment rate, inflation above target, and plummeting business confidence. A weaker pound could boost exports but increase import costs, stoking inflation and limiting further rate cuts. Government borrowing is projected to reach £3.5 trillion by 2031, with £750 billion in interest adding to the pressure.
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