Sterling Surges Amid Rising Business Prices and Central Bank Anticipation

Sterling rose against major currencies as a survey indicated rising prices in Britain. Despite businesses cutting staff and showing pessimism, the pound rebounded partially from last week's losses. The Bank of England's upcoming decision is critical, particularly given inflation concerns affecting interest rate policies.

Sterling showed strength against the dollar and euro on Monday as a new survey highlighted rising business activity prices in Britain. Investors are closely watching the upcoming central bank meetings this week, notably the Bank of England session on Thursday, anticipating key interest rate decisions.

British firms reduced staff at the quickest pace in nearly four years and expressed a more pessimistic economic outlook, according to a survey disclosed on Monday. The S&P Global Flash Composite Purchasing Managers' Index maintained its position at 50.5 in December, barely above the neutral growth line but undershot expectations of 50.7.

The British pound gained 0.52% against the U.S. dollar, recovering from last week's downturn. Prices charged by companies escalated at the fastest rate in nine months, influenced by rising input costs like salaries. These conditions signal persistent inflationary pressures, cautioning the Bank of England against hasty interest rate reductions.

(With inputs from agencies.)