British Pound Weakens Slightly After Inflation

The British pound edged down slightly to around $1.29 as traders digested a weaker-than-expected inflation reading and awaited the Spring Statement.

The UK's annual inflation rate eased to 2.8% in February, below the forecasted 2.9% but in line with the Bank of England's projections.

Services inflation remained steady at 5%.

However, the decline is expected to be temporary, with the central bank anticipating inflation to rise toward 4% later this year.

Markets currently price in a 92% probability of a 25bps rate cut by the BoE in August and around a 60% chance of a second reduction before year-end.

Meanwhile, Chancellor of the Exchequer Rachel Reeves is set to present the economic outlook and announce significant cuts to UK government spending, amounting to billions of pounds.