Sterling drops as falling UK house prices add to recession worries
Sterling fell on Thursday against the U.S. dollar and euro as the Royal Institution of Chartered Surveyors said Britain saw in November the most widespread house price falls since early in the COVID-19 pandemic.
The survey showed demand from buyers and sales activity slowed in the face of higher borrowing costs.
Investors also pondered how interest-rate hike bets by the Bank of England will worsen the recession outlook in Britain.
The Bank of England (BoE) is expected to raise bank rate by 50 basis points to 3.50% next week despite the economy moving towards recession, as it battles inflation running at more than five times its target, a Reuters poll found.
Quarterly forecasts suggest the economy shrank 0.2% last quarter and will contract by 0.4% in this one, meeting the technical definition of recession.
The outlook for next year is just as gloomy, with the economy expected to shrink in the first three quarters of 2023, according to economists polled by Reuters.
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