Sterling's Struggle: Uncertainty Looms Over Bank of England Meeting

The British pound remained under pressure on Monday, facing challenging conditions against both the dollar and euro. Traders are preparing for a pivotal Bank of England meeting on Thursday, which carries significant uncertainty regarding a potential interest rate cut.

Despite data indicating the strongest performance for British factories in a year, driven by unique factors, sterling saw little improvement. The currency was down 0.27% against the dollar, settling at $1.3132, hovering just above a recent six-month low, and showed little movement against the euro.

Market analysts are now focusing on the Bank of England's upcoming decision. Current market pricing suggests a one-in-three chance of a 25-basis-point rate cut this week, with even higher odds for next week or December. Revelations from British finance minister Rachel Reeves' budget in November could further sway market dynamics.