Strategist: Political risk and prospect of interest rate cuts weaken the outlook for the pound.

Ebury strategist Matthew Ryan stated in a report that the ongoing uncertainty surrounding UK Prime Minister Keir Starmer's future and the prospect of further interest rate cuts by the Bank of England could weigh on the pound. He said that UK economic growth is expected to nearly stagnate in the second half of 2025, and inflation may slow down in the coming months. He also mentioned that the Bank of England is almost certain to cut interest rates again in March or April. Key data on Tuesday regarding the labour market and Wednesday's inflation figures will be crucial. Given the possibility of further interest rate cuts and ongoing political uncertainty, "our optimism towards the pound has slightly diminished compared to not long ago." The pound fell by 0.1% to $1.3607. The euro was steady against the pound, at 0.8711 pounds.