Institutions: Interest Rate Disparity Between UK and Eurozone Could Weigh on Euro

Patrick Munnelly, a market analyst at TickMill Group, has indicated in a report that it is expected for the policy interest rates in the UK to remain at higher levels relative to the Eurozone in the long term, potentially exerting pressure on the Euro against the British Pound.

Currency market pricing suggests that the Bank of England‘s bank rate is projected to rise to 6% and remain at that level until June 2024, whereas the European Central Bank‘s deposit rate is expected to peak around 3.75% and then begin descending, following the UK’s trajectory.

The prolonged period of elevated rates in the UK might place downward pressure on the Euro against the British Pound.