Pound rises above $1.30 for first time since November

The British pound has risen above $1.30 for the first time since November. This increase comes amid persistent high inflation in the UK and a general weakening of the US dollar. The pound climbed in early trading on Tuesday, marking a 3% increase this month. Concerns about the impact of President Donald Trump's trade policies on the US economy have led to a decline in the dollar. Since January, the pound had faced challenges due to worries about the UK's public finances. However, higher-than-expected inflation has made investors believe the Bank of England may keep interest rates steady longer than previously thought. Experts suggest that the pound's rise is partly due to its comparatively better interest rate outlook. The dollar was strong after the US election, but it has struggled this year as investor confidence in Trump's economic policies has fallen. Analysts indicate a growing belief that these policies may not enhance US growth or the dollar's strength. Craig Inches from Royal London Asset Management noted that fears of a US economic slowdown are leading to expectations of more interest rate cuts by the Federal Reserve, while rising UK inflation could keep rates stable at the Bank of England. Inflation in the UK reached 3% in January, higher than expected. Despite the Organization for Economic Cooperation and Development (OECD) lowering its growth forecast for the UK, the pound has remained resilient. The OECD now expects the UK's GDP growth for 2025 to be 1.4%, down 0.3 points from earlier predictions. Last week, UK Prime Minister Sir Keir Starmer expressed disappointment over the US imposing new tariffs on steel and aluminum. However, he reaffirmed the UK's commitment to maintaining a strong trade relationship with the US and stated that all options would be considered in responding.