Pound Holds Steady as UK and US Edge Towards Trade Deal

The British pound remained stable on Thursday following reports of a potential trade deal between the U.S. and the UK, coinciding with expectations of a Bank of England rate cut. Mid-sized UK firms saw a stock market rally, while UK Prime Minister Keir Starmer is set to update on U.S. trade negotiations.

The British pound remained stable on Thursday amid reports of a forthcoming U.S.-UK trade deal poised for announcement. This news coincides with the anticipated interest rate cut by the Bank of England.

Sterling surged as much as 0.5% against the U.S. dollar, though gains were trimmed, reflecting a mood of cautious optimism. A potential deal would mark the second trade agreement for the UK in a week, following one with India.

In response, the UK's mid-sized firms enjoyed a stock rally, with the FTSE 250 index climbing 0.5%, outpacing the FTSE 100, which rose just 0.1%. This upturn came on the back of a record-winning streak driven by strong earnings reports and a hopeful easing of global trade tensions.

(With inputs from agencies.)