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LONDON: The pound was little changed on Thursday as markets were focused on a raft of major central bank meetings that will culminate with the Bank of England next week.

Sterling stood at $1.2441, after holding broadly steady the previous day as the US Federal Reserve held interest rates as expected and said it is in no hurry to cut again.

The European Central Bank is widely expected to reduce rates at 1315 GMT on Thursday, in a reflection of the slowing euro zone economy and cooling inflationary pressures.

The euro was flat against the pound on Thursday at 83.64 pence.

Britain’s currency has recovered much of the ground it lost in early January as investors sold British government bonds and sterling.

The bond sell-off was largely driven by global factors, particularly a strong US economy. But analysts said the drop in the pound at the same time mirrored concerns about low growth, sticky inflation and high government debt levels in Britain.

Data released two weeks ago relieved the pressure, however, showing that services inflation fell to its lowest since March 2022.

Investors expect the Bank of England to cut interest rates by 25 basis points next Thursday to 4.75%, when it will also update its economic growth and inflation forecasts.

Financial markets on Thursday priced in almost three quarter-point BoE rate cuts this year, compared with fewer than two in early January.

Sterling jumps as tariff doubts weigh on dollar

Finance minister Rachel Reeves gave a speech on Wednesday outlining plans to boost UK growth, including backing a long-delayed new runway at London’s Heathrow Airport.

“Potential investors in UK plc are still confronted by headwinds that include high energy prices, high interest rates and the forthcoming hikes in taxation and minimum wages,” said Jane Foley, head of FX strategy at Rabobank.

“Although a dovish statement from the BoE at the Feb. 6 policy meeting can be expected to keep the pound on the back foot in the near term, it would also provide comfort for investors and the business community.”

Data on Thursday showed UK mortgage lending rose by the most since September 2022 in December, although the pound displayed little reaction.

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