Pound unfazed by budget date, set for best monthly showing since April

Still, attention was returning to the UK outlook after the UK budget date announcement.

Traders will be watching the budget closely for clues on how the UK's new prime minister and finance minister will boost economic growth without endangering stretched public finances.

Prime Minister Andy Burnham, who moved into Downing Street less than two weeks ago, has said he will honour the fiscal rules which include a pledge to balance day-to-day spending with tax revenues by the end of the decade.

Economists say the government has only a small margin of error for hitting that target and some of Burnham's policy priorities — such as extra defence spending and better social care — will put more strain on the public finances.

Some analysts say easing pressure on the Bank of England to hike rates is a positive for UK borrowing costs although that could weigh on sterling.

On Thursday, the BoE kept rates on hold as it waits for a keener sense of how much the U.S.-Iran war will push up inflation.