In European trading on Thursday (Oct 27), / fell back from high to trade at 1.1614, down 0.08%.
The delay poses difficulties ahead of economic forecasts and an update next week without knowing the details of the government’s fiscal plans.
But sterling remained up more than 1 percent, trading at a six-week high.
Traders expect less than 150 basis points of interest rate rises by the end of the year, but forecasts for a sharp 100 basis point rise on November 3 were raised to 37 per cent, higher than before the delay in fiscal planning.
A few weeks ago, markets thought a 100 basis point rise was a sure thing.
The UK faces the risk of recession as the Bank of England continues to raise interest rates to control double-digit inflation that has returned to 40-year highs, with low growth and rising borrowing costs adding to strains on already stretched public finances and creating difficulties for the new government, according to analysts.
At the same time, a delay would be a headache for the Bank of England, as it would mean issuing economic forecasts and updating monetary decisions next week without knowing the details of the government’s fiscal plans.
GBP/USD hovered around 1.1600, pausing the two-day bullish momentum seen in early European trade.
The dollar tried to rally ahead of key US data.
Markets remained cautious about the forthcoming UK fiscal plan.
