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Sterling's run as the G10's star currency looks fragile as the Bank of England turns cautious

9/9/2026

The British pound has been the surprise performer among G10 currencies, the label for a basket of major global exchange rates, but the Bank of England is now signaling a more cautious stance on rates at the exact moment its peers are still pushing them higher.

In plain terms, the case that lifted the pound is starting to work against it. An upcoming budget adds another layer of risk. How the pound got here Sterling's run rested on two things.

The UK economy proved more resilient than many expected, which gave the Bank of England reason to keep raising interest rates.

When a central bank lifts rates, it tends to draw foreign capital because investors earn more holding that currency's assets, and that increased demand pushes the currency higher.