The British pound climbed above $1.34, its strongest level since early October, continuing to benefit from broad US dollar weakness as traders looked ahead to 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. Fresh economic data due ahead of the central bank’s decision, will help shape the monetary outlook for 2026. Labour market data showed the unemployment rate reached the highest since 2021 and wage growth slowed although less than expected. Inflation is also due before the monetary decision. Market participants continue to price in the possibility of one or two further rate cuts next year.