Sterling (GBP) rose against major currencies on Monday as investors largely ignored a modest increase in dovish bets from the Bank of England (BOE) for next year. Traders believe interest rates will be cut by 53 basis points (bps) in 2025, higher than the 46 basis points cut after the Bank of England's policy announcement on Thursday.

Dovish bets on the Bank of England increased after three of the nine members of the Monetary Policy Committee (MPC) proposed a 25 basis point interest rate cut, more than the one predicted by market participants. Investors believe the 6:3 split in the vote sets the stage for a dovish turn next year, which has weighed heavily on the pound.

Market expectations for a 53 basis point rate cut in 2025 suggest at least two 25 basis point rate cuts. Still, speculation on the number of BoE rate cuts is similar to that of the Federal Reserve and less than what the European Central Bank (ECB) expects, making GBP an attractive bet over the wider term.

Instead, analysts at Deutsche Bank expect the Bank of England to announce four rate cuts next year, including one in the first half and the rest in the second half.

Meanwhile, data released on Monday downgraded the UK's economic growth rate in the third quarter of this year, raising concerns about the UK's (UK) economic outlook. The Office for National Statistics (ONS) reported that the economy remained stagnant in the third quarter, with growth of 0.4% between April and June, less than the 0.1% expansion previously forecast.