GBP/USD bulls struggle as UK tax plans and weak data weigh

• GBP/USD saw fresh downside challenges on Thursday.
• Despite being long overdue for a bullish rebound, Cable bulls are unable to catch a break.
• UK PM Starmer is poised to waive off planned tax increases.

GBP/USD caught a brief bullish slant to Thursday's trading window, with Cable traders brushing off a worse-than-expected Gross Domestic Product (GDP) growth print from the third quarter. However, late-day flows turned sour after reports broke that UK Prime Minister Keir Starmer is poised to cancel a batch of planned tax increases intended to help bolster the UK's questionable financial position.

With the US government set to reopen, at least temporarily, markets are now looking ahead to the resumption of critical economic dataset releases. US White House officials toyed with the idea of declaring entire batches of inflation and growth data as "lost" during the government closure, specifically the October inflation and employment figures, which could never be released. A critical gap in key inflation and labor information is a prospect that is likely sitting poorly with investors who are eager to try and draw a bead on the chances of a third straight interest rate cut from the Federal Reserve (Fed) on December 10.

Despite a potential gap in the October data, September's Nonfarm Payrolls (NFP) jobs report is rumored to be getting prepared for a late release next week, and will serve as one of the last chances for the Fed to take a dipstick measurement of the US economy before its next interest rate decision. According to the CME's FedWatch Tool, rate traders are pricing in slightly less than 50% odds of a quarter-point rate cut in December, with around 90% odds that the Fed will blink and wait until January 28, 2026, before giving a third 25 basis point cut.

GBP/USD daily chart