Sterling holds steady as traders await key UK economic data
The British pound remained largely unchanged on Monday, as investors looked beyond reports of a possible end to the U.S. government shutdown and focused instead on upcoming UK economic data that could shape the Bank of England’s (BoE) next move.
Sterling was last up 0.08% at $1.3175 and slightly stronger against the euro at 87.83 pence. The pound ended last week with little overall change, despite the BoE’s decision on Thursday to hold interest rates steady. The close vote — with five policymakers favoring no change and four pushing for a cut — shifted market attention to the central bank’s December meeting, News.Az reports, citing Reuters.
According to Barclays analysts, the next few days will be decisive:
“Data evolution remains key for Monetary Policy Committee pricing, particularly as Governor Bailey’s swing vote was explicitly data dependent,” the bank said in a note.
Investors will closely watch Tuesday’s employment report and Thursday’s preliminary Q3 GDP figures, both seen as crucial indicators for the BoE. Markets currently see a 25-basis-point rate cut in December as more likely than not, though not guaranteed.
Attention is also turning to the UK’s upcoming budget in late November. Finance Minister Rachel Reeves is expected to raise taxes, though details remain uncertain amid speculation in the British press.
Meanwhile, optimism in the U.S. over progress to reopen the federal government lifted equity and bond markets but had limited impact on currencies. The pound slipped 0.4% against the Australian dollar and gained 0.5% versus the Japanese yen, mirroring broader market trends.
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