Pound Holds Steady

London: 1 January 2024 (TraderMade): In the wake of the S&P Global UK Manufacturing PMI data announcement, the Pound Sterling (GBP) is experiencing a lackluster trading session.

Investors are cautiously returning to the market after a festive week, and the GBPUSD pair is anticipated to exhibit movement after the release of December's manufacturing PMI. The GBPUSD pair dipped by 0.07% to 1.2725 at about 09:45 AM GMT.

Recession fears grip UK markets.

The Bank of England (BoE) may consider initiating interest rate reductions sooner than anticipated, given the deepening fears of a recession. Market participants expect a potential start to interest rate cuts by the BoE from May, as the UK economy faces the risk of a technical recession.

The BoE may cut rates sooner (despite past resistance) as Sterling awaits December PMI data. Tight budgets and looming recession cloud Pound's Dollar gains.

Latest estimates from the UK Office for National Statistics (ONS) reveal a 0.1% contraction in the UK economy in the third quarter of 2023. The BoE's lack of growth expectations for the final quarter of 2023 raises concerns, with a contraction during the October-December period signaling a technical recession (two consecutive quarters of negative growth).

Market participants closely monitor these developments as Pound Sterling navigates through uncertain economic terrain. Get GBPUSD Live Rates and stay updated to make informed decisions.