The GBP/NZD currency pair gained at the start of the week ahead of the outcome of the Bank of England’s policy meeting.
The Bank of England is expected to lower its benchmark interest rate by 25 basis points to 3.75% at its December 18th meeting.
In November, the BoE left borrowing costs without change at 4%, while four policy makers voted in favor of a 25 basis point rate cut to 3.75%.
BoE policy makers acknowledged that UK CPI inflation had peaked and underlying disinflation had shown progress.
A subdued economy and rising labor market slack were also factors supporting disinflation, the BoE had said.
Policy makers also noted risks over achieving the 2% inflation target were now more evenly balanced. Persistent inflation has become a lesser concern, while downside risks from weak demand have risen.
In case disinflation continued as anticipated, the bank rate would likely move lower at gradual pace, the BoE had said.
Meanwhile, NZD traders will also look to New Zealand’s half year economic and fiscal update due out tomorrow.
In addition, renewed concerns over China’s growth and property sector weighed down the kiwi dollar.
Chinese data showed weaker-than-expected industrial production and retail sales for October. Fixed asset investment contracted sharply, highlighting slower business spending.
Fears over a potential debt crisis in China’s property sector also persisted. State-backed developer China Vanke reportedly failed to secure debtholder approval to postpone payments on an onshore bond due December 15th.
The GBP/NZD currency pair was last up 0.37% on the day to trade at 2.3096.
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