The sterling dipped slightly below $1.27 as traders processed key economic data and looked ahead to the Bank of England’s monetary policy decision on Thursday.
British pound dips below $1.27
The UK’s annual inflation rate rose to 2.6% in November, in line with expectations, marking a second consecutive monthly increase. Services inflation held steady at 5%, slightly below forecasts of 5.1% but above the BoE’s projection of 4.9%. Earlier in the week, wage growth in the UK exceeded expectations, adding to the economic mix.
BoE to keep rates unchanged in next meetings
The Bank of England is widely expected to keep its benchmark interest rate unchanged while maintaining a cautious stance on future rate cuts. Markets are currently pricing in two quarter-point rate cuts by the end of 2025, with about a 40% chance of a third reduction.
