Sterling Falls to 3-Month Low

2025-10-28 13:56 By Agna Gabriel 1 min. read

The British pound fell to around $1.32, its weakest level since late July, as traders slightly increased bets on Bank of England rate cuts.

The move followed reports that the Office for Budget Responsibility plans to downgrade the UK’s productivity growth forecast by about 0.3 percentage points, a revision that could leave a £20 billion gap in public finances.

The downgrade adds pressure on Chancellor Rachel Reeves ahead of next month’s budget, where she is expected to outline measures to address a fiscal shortfall of up to £35 billion.

Softer inflation data also reinforced expectations of monetary easing, with the BRC report showing further declines in food price inflation, following last week’s cooler-than-expected CPI figures.

The easing price pressures have helped calm concerns about persistent inflation.

As a result, money markets now assign roughly a 68% probability of a 25 basis-point rate cut by the Bank of England in December.



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