Pound drops as UK economy shrinks

Shafaq News

The pound dipped on Friday after data showed the UK economy unexpectedly shrank in the three months to October.

Economic activity fell by 0.1% between August and October, while falling 0.1% in October alone, according to data from the Office for National Statistics. A Reuters poll had offered a forecast for no growth in that time.

Sterling was last at $1.338, a fraction softer on the day near session lows, while weakening against the euro , which was at 87.72 pence.

The pound was still headed for a rise of 0.36% this week, having hit a two-month high on Thursday. It was also set for a third successive weekly gain, largely as investors have sold the dollar on expectations of further Federal Reserve easing next year.

The Bank of England meets next week to decide monetary policy. Markets currently attach a 90% chance of a drop in borrowing costs.

(Reuters)

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