GBP sharp rally against the EUR in the past 2 weeks on French budget woes has stabilised with the hopes around the 2027 French budget.
However, GBP performance recently shows echoes of the GBP safe haven flows during the 2010-12 Eurozone sovereign debt crisis, except that this time the UK has a much higher yield than the alternative CHF safe haven. In the government bond market it is also noticeable that the 10yr Gilt-U.S. Treasury spread has narrowed in September. Though UK fiscal tightening is not perfect, the new Burnham/Healey team are committed to fiscal consolidation via the fiscal rules ahead of the October 28 budget. UK fiscal policy is better than the U.S. or France.