GBP/USD weakens to near 1.3150 as BoE rate cut expectations grow on weak UK data

• GBP/USD softens to around 1.3155 in Monday's early Asian session.
• Weaker UK economic data has prompted the BoE to deliver another rate cut in December. 
• Analysts believe that the resumption of US economic data will show job market weakness and a potential slowdown.

The GBP/USD pair declines to near 1.3155 during the early Asian session on Monday. The Pound Sterling (GBP) softens against the US Dollar (USD) amid concerns about the UK's fiscal debt and weak economic data from the UK. Bank of England (BoE) External Member Catherine Mann is set to speak later on Monday. 

The pound loses ground after a report that UK Prime Minister Keir Starmer and Finance Minister Rachel Reeves have dropped the plan to raise income tax rates, in a dramatic turn ahead of the budget on November 26.

Additionally, the recent UK economic data, including cooling wage growth and weaker Gross Domestic Product (GDP) data, have prompted further economic concerns and fueled bets on a December rate cut from the BoE. This, in turn, could weigh on the GBP in the near term. Bets for a 0.25 percentage point cut have surged to near 80% probability, according to Reuters.  

On the other hand, traders brace for a backlog of US data following the government's reopening, which they expect will likely point to a weakening economy. This might drag the Greenback lower and create the tailwind for the major pair. 

Financial markets are now pricing in nearly a 54% chance that the US central bank will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from a 62.9% probability that markets priced in earlier last week, according to the CME FedWatch Tool.