Reuters has reported on the Financial Times Sunday article that the British finance minister Rishi Sunak is considering a cut to the 5% rate of value-added tax on household energy bills.

''Government officials briefed on the Budget preparations said Sunak had looked at reducing the 5% VAT, but no decisions had been taken yet, the newspaper added.''

Market implications

This is unlikely to have any material impact on the pound in the open but is bullish for the long term as the UK resolves a means to mitigate the risks of the energy crisis to UK businesses.

Meanwhile, the pound rose on Friday for its biggest weekly gain against both the dollar and the euro since May, boosted by a combination of dollar weakness and expectations that the Bank of England will raise rates this year.