British Pound futures finished 2025 on a soft note, recording four down sessions in the last five despite an annual gain of over 7.5%. The Bank of England cut rates to 3.75% in December, though markets expect the pace of easing to slow in 2026 with only two 25 basis point cuts projected. While UK inflation fell to 3.2% in November, services inflation remains elevated at 4.4% and the unemployment rate has risen to 5.1%, the highest level since 2021. Economic growth for 2026 is projected at 1.3%, primarily supported by government spending as private sector strength remains subdued.