Pound Sterling falls again


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waterman
Written by Dan Waterman
June 18th 2025
Nervous traders move into safe assets as Trump demands "unconditional surrender" of Iran..

Will the US join Israel's attack on Iran and if they do, what does it mean for financial markets?

Global stocks have been lower since Israel attacked Iran 6-days ago and they dropped further yesterday after President Trump's above message yesterday. Geopolitical uncertainty is bad business and as the Pound isn't a safe haven currency, it has fallen against the majors..

£-€ has fallen below 1.17 mid-market for the first time in 7-weeks. With plenty of UK data still due out, it could be another bad week for the pair.

Lloyds Bank are suggesting a near-term drop to the low 1.16's is now likely.

Pinning the Pound down further today was the outcome to the UK's inflation release. Headline inflation fell from 3.5% to 3.4%, but it was 2 other areas that caught the eye amongst economists who have subsequently raised the chances of an August interest rate cut.

Core inflation fell from 3.8% to 3.5% and services inflation fell from 5.4% to 4.7%. These were both surprising and 'chunky' drops, that won't change what the BoE do tomorrow, but it may by the time August comes.