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Pound sterling faces the Bank of England on Thursday.

Our headline view is pound sterling can rebound a little further in the near term as a consolidation of the recent selloff ensues.

The pound to euro exchange rate (GBP/EUR) fell 0.40% last week to plug its lowest level in two years , amidst rising odds of an interest rate cut at the Bank of England before the end of 2025.

The question of interest rates comes to a head on Thursday when the Bank delivers the final Monetary Policy Report (MPR) of the year.

The previous three MPRs have accompanied a rate cut, but this one could be different, as the Bank could opt to leave rates unchanged.

That would be supportive of pound sterling, all else equal. But, and here is the crucial point for readers to take away this

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