Anna 
The British Pound is trading within a narrow range, with improved market sentiment helping alleviate downward pressure on the currency. However, the Pound’s upward momentum remains limited due to stagnant prospects for the UK’s economic growth. The demand for GBP/USD in the near term hinges on the performance of the UK economy in the fourth quarter of 2023.
Recent data concerning the UK economy reveals that manufacturing continued to decline in October, driven by rising borrowing costs and a cost-of-living crisis. This sets a negative tone for economic growth in the period from October to December.
The Bank of England (BOE) opted to keep interest rates unchanged at 5.25% for the second consecutive time on Thursday to avoid impacting the limited economic growth. Signs suggest that the economy is barely avoiding a recession. Business optimism has plummeted to its lowest point in ten months, prompting significant cuts in wages, procurement, and inventory by employers. Regarding the inflation outlook, Bank of England Governor Andrew Bailey appears confident in reducing the inflation rate to 2% within two years.
