The Pound edged higher against a generally weaker Dollar on Friday, as traders weighed data showing a slowdown in business activity growth and awaited comments from Bank of England Governor Andrew Bailey.

Market participants were also focused on the upcoming budget from UK Chancellor Rachel Reeves, set for release in eight weeks.

At the time of writing, Sterling had gained 0.1% against the Dollar to $1.3449, while slipping 0.1% against the Euro to 87.25 pence.

A PMI survey released on Friday indicated that UK business activity expanded in September at its slowest rate in five months, as firms and households delayed major spending amid uncertainty over potential tax increases in November’s budget.

This came a day after a Bank of England survey revealed that British companies reported the weakest hiring intentions since 2020, alongside expectations of the sharpest rise in consumer price inflation since early 2024, Reuters news agency reports.

Investors will be paying close attention when Bank of England Governor Andrew Bailey delivers a keynote address at a farewell symposium for Dutch central bank chief Klaas Knot later on Friday.

If Bailey does address monetary policy, analysts expect him to lean toward a hawkish stance, signalling to markets that ongoing inflationary pressures will likely rule out additional rate cuts for the remainder of the year.

Markets are pricing in steady rates at the Bank of England’s upcoming meeting on 6^th November, with expectations of two additional cuts in 2026.

Cable remained under pressure from fiscal concerns, with attention also drawn to elevated UK gilt yields, which continue to diverge from US 10-year yields.

That dynamic weighs on Sterling, as rising yields reduce fiscal flexibility, increase the likelihood of additional tax rises or spending restraints, and dampen expectations for UK economic growth.