George Saravelos of the research department at Deutsche Bank stated in a report that last week's budget in the United Kingdom was a positive signal for the British pound. The budget is expected to promote economic growth and inflation, leading to higher interest rates in the United Kingdom than previously anticipated, and making UK government bonds more attractive relative to other assets.

Saravelos said: 'Therefore, we still believe that the British pound's performance is superior to many other currencies.'

He mentioned that the market reaction since the budget announcement is a classic response to fiscal stimulus, resulting in a flattening of the yield curve. This is in stark contrast to the controversial budget in 2022 by former Prime Minister Liz Truss, which led to a sharp increase in UK bond yields and a decline in the British pound.