British markets experienced a welcome calm on Monday following last week’s volatility. The pound strengthened slightly against the euro and remained steady vis-à-vis the dollar, marking a recovery from previous lows.
Reports that Finance Minister Rachel Reeves does not intend to raise income tax rates had initially alarmed investors. This uncertainty resulted in the pound hitting its weakest level against the euro since early 2023, which also impacted government bond performance.
Monday saw the euro down 0.1% against the pound, a positive indicator for UK markets. Yet, the easing may be temporary, with upcoming consumer inflation data and political factors possibly influencing future market dynamics.
