The British pound rose to $1.355, nearing its three-year high from May 26, supported by rising US-China trade tensions and new US metals tariffs. President Trump announced plans to double tariffs on steel and aluminum, while China accused the US of breaching their recent trade deal and vowed to respond. Optimism around the UK economy also boosted the pound. The IMF raised the UK's 2025 growth forecast to 1.2% from 1.1%, but warned Chancellor Rachel Reeves to maintain fiscal discipline ahead of her June 11 Spending Review. Inflation remains sticky, with grocery prices up 4.1% in May, the highest since February 2024, according to Kantar. As a result, markets now expect only about 40 basis points of interest rate cuts from the Bank of England by the end of the year.