Sterling weakened on Wednesday after an unexpected drop in UK inflation all but guaranteed that the Bank of England would cut interest rates, while the dollar rose as traders awaited other central bank decisions and weighed commentary from Federal Reserve officials.

Will interest rates go down tomorrow? Bank of England’s key factors and 2026 predictions - A rate cut is heavily expected to end the year after inflation falls - and some experts are calling for more

The UK unemployment rate rose to 5.1 per cent and wage growth slowed in the three months to October as employers held off hiring ahead of the government’s second tax-raising Budget.