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[Euro/Pound Sterling Rises Amid UK Budget Concerns] ⑴ The euro rose against the pound sterling to around 0.8775 on Monday (November 3). Increasing political pressure on UK Chancellor Rachel Reeves led to the euro's rise. The Bank of England's interest rate decision, due this Thursday, will be the focus of the market. ⑵ Traders are worried about UK fiscal risks ahead of the Chancellor's upcoming autumn budget. Threats of tax increases and concerns about an economic slowdown pushed the euro/pound sterling to a record high (0.8817). ⑶ While most analysts expect the Bank of England to keep interest rates unchanged on Thursday (due to persistent inflation concerns and the upcoming autumn budget), some believe that tax increases and spending cuts as part of the austerity budget could prompt the Bank of England to cut rates earlier – the market expects it to lower the current 4% rate to 3.75%. ⑷ The European Central Bank kept its deposit rate unchanged at 2.0% for the third consecutive meeting last week. President Lagarde emphasized that the central bank is in an "ideal position" and clearly stated that it will take all necessary measures to maintain the current favorable situation. Meanwhile, European Central Bank Governing Council member Joachim Nagel said on Monday that eurozone economic data was largely in line with the central bank's forecasts, but policymakers would maintain policy flexibility. (5) The French government will begin closed-door consultations with legislators this week in an attempt to salvage the stalled budget. Defense Minister Le Cornu is striving to avoid repeating the mistakes of his predecessors—several ministers were forced to resign due to a vote of no confidence in their fiscal plans. Another collapse of the government could trigger a snap election. The uncertainty and renewed fears of political turmoil in France may put downward pressure on the euro against the pound in the short term.