Euro climbs as Sterling slips on cautious BoE hold
EUR/GBP is trading higher on Thursday, climbing toward the 0.8600 barrier and touching its highest in several days. The Pound has slipped across the board after the Bank of England (BoE) held interest rates and struck a more cautious tone than much of the market had priced in.
The British Pound slipped against the Euro on Thursday as the Bank of England chose a cautious stance on interest rates. The BoE maintained the Bank Rate at 3.75%, in line with the previous six consecutive holds. Three dissenting members, who had wanted a quarter-point rate increase to 4.00%, joined the majority. UK inflation is currently at 3.1%, above the 2% target and a five-month high, prompting the Bank to warn of an increasing risk of a rate hike.
Governor Andrew Bailey highlighted energy price fluctuations from the Middle East conflict, emphasizing that prolonged volatility would have a significant impact. Though the central bank aims to keep any rise in inflation temporary, traders now shift their focus to UK Retail Sales for August, with forecasts pointing to another slight decline.
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