GBP/USD pressured as Reeves maintains fiscal stance ahead of UK budget

GBP/USD has weakened 0.2% to 1.2950 as UK Chancellor Rachel Reeves' comments highlighted persistent economic challenges facing Britain. Reeves acknowledged that inflation remains stubbornly elevated while interest rates continue constraining economic growth, with global government borrowing costs rising sharply. Her emphasis on maintaining 'iron clad' commitment to fiscal rules ahead of the November 26 autumn budget has dampened expectations for growth-supportive measures. Markets interpret her defensive stance and blame-shifting rhetoric as indicating limited fiscal flexibility, weighing on sterling sentiment. The pound faces immediate support at 1.2920 (Friday's low), with resistance at 1.2985 (50-day moving average). Traders are positioning cautiously ahead of the budget announcement in three weeks, with concerns that fiscal constraints could limit the UK's ability to stimulate growth amid global economic headwinds.