Pound Sterling Holds Steady Amid Global Currency Shifts

The pound has performed excellently against the US dollar in 2024, despite thin holiday trading. Factors like persistent UK inflation and the Bank of England's policy approach have contributed. However, as Britain's economy slows, continuing this performance in 2025 might be challenging.

In a thin trading session on Monday, the pound held its ground with an upward trend in its value against the dollar, positioning itself as the best-performing major currency of the year. Sterling gained 0.1% against the dollar, sitting at $1.2595.

Despite a 1% fall since the Federal Reserve's December 18 policy meeting, sterling's performance remains strong, bouncing back close to 0.5% since last Monday. Analysts credit the Bank of England's cautious rate-cut approach amid persistent UK inflation as key factors bolstering its resilience.

As British inflation remains a concern, Prime Minister Keir Starmer seeks regulatory changes to stimulate economic growth. Market watchers speculate on the pound's ability to maintain its stronghold as the year concludes and a slowing economy presents new challenges.

(With inputs from agencies.)