Finance
Sterling ticks lower as traders brace for busy week
Published by Global Banking and Finance Review
Posted on December 8, 2025
2 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on December 8, 2025
2 min readLast updated: January 20, 2026
Sterling dips as markets brace for US rate cuts and UK economic data. Traders expect Bank of England rate cut on December 18.
LONDON, Dec 8 (Reuters) - The pound dipped on Monday, although volatility remained contained, as investors prepared for an action-packed week that, among other things, could bring a U.S. rate cut.
Sterling climbed to six-week highs last week, helped by relief that finance minister Rachel Reeves’ budget was better received than feared and by expectations that the dollar will stay under pressure if the Federal Reserve signals further rate cuts beyond December’s widely anticipated move.
The pound was last down 0.1% on the day against both the dollar and the euro, which traded at $1.3325 and 87.45 pence, respectively.
UK economic growth figures for October are due on Friday. A Reuters poll of economists offers a forecast for a rise of 1.4% from the same month last year and a rise of 0.1% over the September reading, which was skewed by a cyberattack at Jaguar Land Rover that shut down production at the automaker, thereby hitting national growth.
"Overall, some good news for the UK economy could be on the cards this week, although we continue to think that the underlying trend is for the economy to stall in the coming months," XTB research director Kathleen Brooks said.
Money markets show traders are placing a roughly 87% chance of the Bank of England cutting rates by a quarter point to 3.75% when it meets on December 18. What happens after that is less clear. There is one more cut priced in the first half of 2026 and then the BoE is expected to be in hold mode, like most other major central banks.
(Reporting by Amanda Cooper; Editing by William Maclean)
The Bank of England is the central bank of the United Kingdom, responsible for issuing currency, maintaining monetary stability, and overseeing the financial system.
A rate cut refers to a decrease in the interest rate set by a central bank, which can stimulate economic activity by making borrowing cheaper.
Economic growth is an increase in the production of goods and services in an economy over a period, typically measured by GDP.
Volatility refers to the degree of variation in trading prices over time, indicating the level of risk associated with a particular asset.
Explore more articles in the Finance category