Founding investors have emptied the pound as soon as possible since 2023 in anticipation of the spring statement this week, as Chancellor Rachel Reeves is expected to reveal 15 billion pounds in spending as part of the efforts made to restore financial discipline.
According to the Bank of America, the past three weeks have seen the most out of the pound from the British pound for more than two years, with money managers – including asset managers and investment funds – which reduces exposure to currency amid increased uncertainty about the economic path in the United Kingdom.
These cuts, designed to meet the commitment of the Labor Party to operate a budget surplus by 2030, come as market morale remains fragile. Analysts at the American Bank have warned that traders are still “likely to be the risk of fluctuation of the pound,” adding: “We are worried about self -consent in the foreign exchange fluctuations market. We feel that the market morale is still fragile and perhaps deviant towards a weaker final result.”
The pound occupied a constant against the US dollar on Tuesday, when it was traded at $ 1.29. It has increased by 3 percent against Greenback since the beginning of the year, and this is significantly due to concerns about President Trump's proposed tariff that weighs the American currency. However, the pound sterling decreased by 2 percent against the euro in 2025 so far, sitting at 1.20 euros.
The hedge funds maintained “short” sites for the pound during most of the past year, betting on more declines in their value. On the contrary, the founding investors remained net on the British pound, expecting a recovery-a position that could collapse quickly depending on the tone and content of the financial statement on Wednesday.
The pound fell to the lowest two -year level on the basis of weighted earlier this year amid a wider sale in the global market. Since then, some expectations have regained that the Bank of England will not make more than interest rates this year – a scenario that usually supports the currency by maintaining higher returns for investors.
However, the spring statement is expected to convert the spotlight to slow economic expectations in the United Kingdom. GDP from the budget responsibility office is likely to be reduced from 2 percent to 1 percent for 2025. At the same time, the UK continues to lead the Group of 10 to the so -called “misery index”, a measure that combines inflation and unemployment rates.
Goldman Sachs rented caution in the short term, indicating that the continuous financial “noise” makes the pound “less attractive in the short term.” However, they noticed that the pound sterling can still benefit from the next round of the American definitions due on April 2, which is expected to reach the continental European economies more than the United Kingdom.
The Investment Bank reviewed its expectations at the end of the year against the pound against the dollar to 1.29 dollars, an increase of a previous estimate of $ 1.26. However, many hinges on how the markets respond to the first main financial intervention of Reeves – and whether the investors find their credible plans amid tightening public financial affairs and wrong growth.