Sterling hits eight-month low

Sterling fell to an 8-month low on the euro and touched its lowest in almost three weeks on the dollar on Wednesday as weaker than expected manufacturing output data fuelled expectations of static UK interest rates.
News that industrial and manufacturing output fell for the third month in a row in August backed a growing market view the Bank of England may be near the top of its rate-raising phase, putting sterling under pressure ahead of a BoE policy decision on Thursday.
No change in rates is expected this week but the market is looking for comments from policymakers as to whether five hikes in the past year have cooled a booming housing market to their satisfaction or whether one more tweak may be in the offing.
"This is jostling for position ahead of the Bank of England decision tomorrow," said Matthew van Dyckhoff, foreign exchange sales manager at Brown Brothers Harriman in London.
"If there's no change for tomorrow, they will be hard pressed to put a rise in for December and the market will have its thoughts confirmed that this is the top."
By 1545 GMT sterling fell to a low of 69.17 pence per euro, although it was only 0.1 percent weaker on the day.
Against the dollar it was 0.2 percent weaker at $1.7780 and on its trade weighted index it dipped to its lowest in over 8 months, at 102.1.
The pound was supported in the early part of this year by market expectations for higher interest rates.
After five hikes, UK rates are at 4.75 percent and recent soft data and dovish comments from individual policymakers have led the market to scale back expectations for higher rates, putting the pound under downward pressure.
Data from the Halifax bank wrong-footed the market early in the session when it registered a 1.4 percent rise in house prices in September, going against other survey evidence which had pointed to a cooling.
The pound shot higher but its gains were quickly reversed when UK manufacturing and industrial output both registered a 0.8 percent fall on the month in August, well below forecasts for rises of 0.3 percent on each measure.