The British pound slipped to $1.3455 on fiscal worries after the Institute for Public Policy Research urged a windfall tax on banks profiting from reserves at the Bank of England. Analysts warn fiscal policy could weigh further on sterling, with Chancellor Rachel Reeves expected to raise taxes again. Still, the pound is set for a 2% monthly gain versus the dollar, supported by strong UK data and reduced expectations of early BoE rate cuts. Markets now see under a 50% chance of easing before end-2025, with the first move likely in spring 2026. Recent surveys showed the strongest business activity in a year, led by services, following hotter inflation.