UK rate decision looms amid recession warning

Sterling was little changed at 83.93 pence against the euro, but dropped to $1.3323 against the dollar as the Bank of England prepared to announce its interest-rate decision today.

The currency was caught between weaker UK economic data and extreme positioning that makes sterling especially vulnerable to a surprise outcome.

The survey showed the UK’s economy was shrinking at its fastest rate since the financial crisis after last month’s Brexit vote, making a Bank of England rate cut today a “foregone conclusion”, according to Markit research company.