20.02.202610:18:26UTC+00Pound Near One-Month Low Despite Strong UK Data

Sterling hovered around $1.35, its weakest level in a month, as robust UK economic data were overshadowed by ongoing dollar strength following hawkish signals from the Federal Reserve. The latest S&P Global UK PMI showed that private-sector activity expanded in February at its fastest pace since April 2024, beating expectations on the back of solid growth in both manufacturing and services. Retail sales also surprised to the upside in January, rising 1.8% month-on-month including fuel and 2% excluding fuel. Meanwhile, public sector net borrowing recorded a £30.4 billion surplus in January, far exceeding forecasts and marking the largest monthly surplus since records began in 1993, surpassing projections from the Office for Budget Responsibility. Elsewhere, minutes from the Federal Reserve’s latest meeting revealed that policymakers remain divided on the interest-rate outlook, suggesting that the next Fed chair could face difficulties in delivering rate cuts.