The pound weakened against its major counterparts in the New York session on Thursday, following the announcement of the nation's latest budget, which included tax rises and big spending plans.

Chancellor Rachel Reeves announced tax rises worth £40 billion in her first budget on Wednesday.

The finance minister announced that spending on National Health Service (NHS) and education in England will rise by 4.7 percent this year. Spending is predicted to rise by £41 billion next year.

The measures are expected to raise inflation, leading investors to pare back bets on Bank of England rate cuts.

The Office for Budget Responsibility (OBR) predicts inflation to average 2.5 percent this year and 2.6 percent next year, before falling to 2.3 percent in 2026.

The pound dropped to a 2-1/2-month low of 1.2843 against the greenback and a 9-day low of 195.37 against the yen, off its early highs of 1.2999 and 198.91, respectively. The currency is seen finding support around 1.22 against the greenback and 190.00 against the yen.

The pound declined to 1-1/2-month lows of 1.1107 against the franc and 0.8447 against the euro, from its early highs of 1.1253 and 0.8353, respectively. The next possible support for the currency is seen around 1.10 against the franc and 0.86 against the euro.

Euro vs Sterling (FX:EURGBP)
Forex Chart
From Oct 2024 to Nov 2024 Click Here for more Euro vs Sterling Charts.
Euro vs Sterling (FX:EURGBP)
Forex Chart
From Nov 2023 to Nov 2024 Click Here for more Euro vs Sterling Charts.