Bets are bearish for sterling as UK rate cut likely this week

Speculators that are the most bearish on sterling in nearly 25 years may be vindicated by yesterday’s survey showing Brexit is probably hitting Britain harder than markets previously envisaged.

Sterling declined against most of its 16 major peers as the data showed UK manufacturing shrank more than initially forecast in July.

Hedge funds and other large speculators ran the biggest net short positions, or bets on the currency’s decline, since records began amid speculation that the Bank of England will cut interest rates for the first time in more than seven years this Thursday to head off the risk of recession.