LONDON (Reuters) - Britain's pound was steady against the dollar on Thursday, holding above an eight-week low reached earlier this week as policymakers continue to push back against expectations for early rate cuts.
Sterling was last down less than 0.1% against the dollar at $1.2620, having plumbed to its lowest level since Dec. 13 on Monday at $1.25175.
On Wednesday, Bank of England Deputy Governor Sarah Breeden, the Monetary Policy Committee's newest member, said she was now thinking about how long interest rates would need to stay at their current level, in a sign that rates are not expected to fall in the near term.
Amid robust growth and a patient BoE, markets have pushed back expectations for the first UK interest rate cuts, with the first reduction not fully priced until August.
A total of 80 basis points of easing is priced in for the year, less than the 120 basis points priced for both the Federal Reserve and European Central Bank.
"The pricing of UK short-term interest rate expectations for H1-24 looks reasonable to us," said Colin Asher, senior economist at Mizuho.
"However, expectations for EUR and USD policy cuts look a little overcooked, which may weigh on GBP in the near term," he added.
The pound was last little changed at 85.36 per euro, close to last week's five-month high of 85.13.