The British pound dropped to $1.26, approaching six-month lows last seen in late November, following disappointing UK economic data.
UK pound down after disappointing GDP data
GDP unexpectedly contracted by 0.1% in October, matching the decline in September, underscoring the challenges the government faces in reaching its goal of making the UK the fastest-growing G7 economy, a target reiterated by Prime Minister Keir Starmer last week. Furthermore, both industrial and manufacturing output shrank, contrary to forecasts that had predicted growth.
What will BoE do?
The Bank of England is expected to keep interest rates unchanged next week and take a cautious stance in 2024, with markets anticipating only three modest rate cuts by the end of 2025.
