# Sterling steadies near June 2020 low
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-05-10
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: British pound stabilises after sliding to two-year low
Meta Description: Discover how recent economic challenges are impacting the British pound's stability and what to expect moving forward. Stay informed with Reuters.
URL: https://financedigest.com/sterling-steadies-near-june-2020-lowhtml

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LONDON (Reuters) – The British pound was little changed on Tuesday, pausing after a slide to its lowest levels in nearly two years on signs that a weakening economy will force the Bank of England to slow its interest-rate hiking cycle.

At 0825 GMT, the pound was flat against the U.S. dollar at $1.2328, just above its [lowest level since June](https://www.financedigest.com/uk-mortgage-approvals-hit-lowest-since-june-2020.html "UK mortgage approvals hit lowest since June 2020") 2020 of $1.2262 reached on Monday.

Against the euro, sterling was little changed at 85.75 pence, near its lowest since December.

The [pound is finally finding some stability](https://www.financedigest.com/digital-pound-could-hit-financial-stability-and-erode-privacy-uk-lawmakers-warn.html "Digital pound could hit financial stability and erode privacy, UK lawmakers warn") after a rough couple of weeks,” ING analysts said in a note.

“Some stabilisation in sentiment should offer additional support today, and possibly help a return to the 1.2500 mark in sterling/dollar.”

On Thursday, the [BoE raised its benchmark interest rate](https://www.financedigest.com/boe-raises-rates-again-as-investors-look-towards-end-of-hikes.html "BoE raises rates again as investors look towards end of hikes") to 1.0% but said it saw the economy shrinking in 2023 and a near 1% fall in gross domestic product in the final quarter of 2022.

[Markets are currently](https://www.financedigest.com/dry-ice-market-2015-outlook-current-and-future-industry-landscape-analysis-2025.html "Dry Ice Market 2015 Outlook, Current and Future Industry Landscape Analysis 2025") pricing in a further 110 basis points of tightening from the BoE this year, taking the benchmark rate to just above 2.0%.

Further evidence of the worsening growth outlook was seen on Tuesday after two reports showed British consumer [spending stuttered in April as the cost-of-living crisis](https://www.financedigest.com/europes-spend-on-energy-crisis-nears-800-billion-euros.html "Europe’s spend on energy crisis nears 800 billion euros") affects consumption.

The [British Retail Consortium said total retail spending](https://www.financedigest.com/valentines-day-spending-boosts-british-retail-sales-in-february-brc.html "Valentine’s Day spending boosts British retail sales in February – BRC") among its members – mostly large chains and supermarkets – was 0.3% lower in April than a year earlier, the first fall since January 2021 when the country was under a COVID lockdown.

Data from payment processor Barclaycard, covering a broader range of spending, showed outlays on essential items [grew by slightly less in April than in March](https://www.financedigest.com/glastons-interim-report-1-january-31-march-2018-orders-received-grew-23-comparable-operating-profit-at-previous-years-level.html "Glaston’s Interim Report 1 January – 31 March 2018: Orders received grew 23%, comparable operating profit at previous year’s level").

[Focus was expected to turn](https://www.financedigest.com/entrepreneurs-worldwide-turn-their-focus-towards-doing-good.html "ENTREPRENEURS WORLDWIDE TURN THEIR FOCUS TOWARDS DOING GOOD") to the British government’s plans for the new session of parliament, expected to be outlined later in the day.

Analysts said the main focus would be on what the [government says](https://www.financedigest.com/employers-and-the-government-should-support-employees-dependency-on-high-cost-credit-says-neyber.html "Employers and the Government should support employees’ dependency on high-cost credit, says Neyber") about the Northern Ireland Protocol, which governs post-Brexit trade between the province and the rest of the United Kingdom.

Any signs in the agenda that the government was introducing legislation that overrides some elements of the protocol, would be negative for sterling, RBC [Capital Markets](https://www.financedigest.com/digital-finance-unlocking-new-capital-in-disrupted-markets.html "Digital Finance: Unlocking New Capital in Disrupted Markets") said.

(Reporting by Samuel Indyk; editing by Dhara Ranasinghe and Emelia Sithole-Matarise)


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