British companies reported some improvement after months of concern over possible tax hikes in Finance Minister Rachel Reeves' budget.

The composite business activity index rose to 52.1 in the preliminary estimate for December from 51.2 in November, beating forecasts. However, the index remains below its long-term average.

The survey was the first comprehensive indicator of the state of the economy since Reeves announced a 26 billion pound tax hike.

The Bank of England is expected to cut interest rates on Thursday for the first time since August. However, the Monetary Policy Committee's vote is expected to be tight as some policymakers are concerned that inflationary pressures remain strong. As for the market, it seems that investors doubted the prospects of policy easing by the Bank of England and GBP/USD resumed its rise as a result of GBP buying. Technically, the buying resumed when approaching the 1.3300-1.3350 area, which we reported earlier.