The GBP/USD pair is experiencing a swift rise, propelled by both internal and external factors.
The British pound sterling, in tandem with the US dollar, is actively gaining ground, with the current GBP/USD exchange rate standing at 1.2532.
On one hand, the GBP is finding support in a weakened US dollar, quickly recovering its position.
On the other hand, domestic developments are also lending considerable support. UK Prime Minister Rishi Sunak has unveiled plans for tax reductions in response to the easing inflationary pressures in the country. The finance minister is anticipated to reveal the initial proposals this Wednesday.
As Sunak pointed out, inflation has halved, and economic growth has strengthened, fostering optimism about increased revenues. Consequently, certain taxes may be waived. While an immediate reduction isn't feasible, UK authorities are committed to disciplined action, prioritizing necessary measures.
Based on October's figures, annual inflation in the UK decelerated to 4.6%, down from September's 6.7%. The drop in the Consumer Price Index (CPI) below 5% marks the fulfillment of one of Sunak's five pledges to the citizens of the UK. The remaining four include reducing the national debt, fostering economic development, improving conditions in the healthcare system, and actively addressing issues related to illegal immigration.