Pound Weakens as UK Retail Sales Data Fuels 40 Basis Points Rate Cut Speculation; FTSE Soars

The British pound weakened following disappointing retail sales data, which has intensified speculation regarding potential interest rate cuts by the Bank of England. Recent reports indicate that traders are increasingly betting on rate reductions in 2025, with swap markets now anticipating approximately 40 basis points of cuts from the Federal Reserve, a notable shift from earlier expectations. The FTSE index has responded positively, rising amid these predictions as the economic outlook remains uncertain, compelling the Bank of England to consider more aggressive monetary easing to support faltering economic growth.