The pound rebounded from an 11-month low against the euro today, as the Bank of England's rate-setting committee was expected to keep interest rates unchanged when it announces its decision later today.
Sterling was trading at 0.76p per euro this morning, while it was at $1.44 against the dollar.
On Tuesday it fell to a five-and-a-half year low against the dollar, after economic data showed manufacturing output fell 1.2 per cent from the year before. Separate data had already shown Britain's economy was growing more slowly than previously thought.
At its previous meeting on 10 December, the central bank's nine-strong monetary policy committee voted 8-1 to keep the benchmark interest rate at a record low 0.5 per cent, with lone hawk Ian McCafferty dissenting.
Investors will be keen to see if he's reversed this stance given the darkening outlook. Since then oil prices have fallen and concern about Chinese economic growth is rising, as is that surrounding the UK's European Union referendum.
"It feels like one-way traffic," RBS economist Ross Walker said. "Most of the developments since their last meeting seem to be pushing in a disinflationary direction."
Economists are expected to be given a detailed understanding of the Bank's latest thinking next month when it publishes new forecasts.