FX.co ★ Sterling Strengthens Ahead of Key Data

The British pound was trading around $1.318 as investors anticipated critical economic data that may shape the Bank of England's future policy decisions. Last Thursday, the BoE opted to maintain interest rates, but the decision came with a narrow margin, as five policymakers voted to hold rates steady while four were in favor of a cut, drawing market attention towards December. Traders are poised to scrutinize Tuesday’s employment data and the preliminary Q3 GDP figures on Thursday for insights, with current market sentiment indicating a 25-basis-point rate cut as a more probable outcome. The UK economy is projected to experience a 0.2% growth in Q3, signifying a third consecutive deceleration. Unemployment is anticipated to climb to 4.9%, the highest level since May 2021, while wage growth is expected to slow down to 4.9% year-on-year. Additionally, investors are keeping an eye on Finance Minister Rachel Reeves' budget announcement in late November, amid speculation about potential tax increases.