The weakening dollar boosts the pound, but fiscal risks in the UK are emerging.

Jin10 data reported on July 1st that the GBP/USD rose to its highest level since October 2021, as uncertainty in U.S. policy puts pressure on the dollar. However, analysts at Monex Europe stated in a report that due to the UK government's public finance difficulties, the pound still faces a risk of falling. The Labour government has proposed cost-saving measures through welfare reform, which has sparked strong opposition from backbenchers. Dozens of Labour MPs are expected to vote against the reforms in Parliament. Analysts indicate that if future cost-saving measures cannot be found, taxes must be raised or borrowing increased in the autumn budget. They noted that either of these scenarios would put pressure on the pound.