The British pound traded little changed near $1.34, continuing to benefit from broad US dollar weakness as traders prepared for the Bank of England’s monetary policy decision later in the week. The central bank is widely expected to cut the key bank rate by 25 basis points to 3.75%, bringing it to the lowest level since 2022, as rising unemployment and the UK’s stagnating economy ease inflationary pressures. However, fresh economic data, due ahead of the central bank’s decision, will help shape the monetary outlook for 2026, including reports on wage growth and inflation, both of which are expected to have slowed. Market participants continue to price in the possibility of one or two further rate cuts next year, with expectations likely to be influenced by these upcoming data releases.