The BoE’s rate cut on August 1 and then a sharp adjustment of positions finally managed to turn the tide in EUR/GBP, note ING FX analysts Francesco Pesole and Chris Turner.
BoE/ECB policy rate spread is 150bp
“Currently, the policy rate spread between the BoE and the ECB is 150bp. We expect this to halve by 2025 and should mean a slightly higher EUR/GBP.”
“In the UK, the new Labour government’s budget on 30 October will be important. This could be restrictive and weigh on sterling with a combination of tighter fiscal policy and looser monetary policy.”
“The Euro could also have a turbulent October. Many governments in the region need to present budget consolidation plans in Brussels. Failure to do so could lead to bond market tension.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
