EUR/GBP is trading around 0.8310 during Wednesday’s European hours, reflecting pressure on the Euro after a decline in the previous session. Market expectations for further European Central Bank (ECB) rate cuts have increased due to improved inflation control but concerns about the Eurozone’s economic outlook.
The ECB has reduced its Deposit Facility Rate three times this year, with another cut anticipated in December. President Christine Lagarde’s comments suggest a weaker economic outlook, prompting predictions of a 25-basis-point cut at each meeting through mid-2025. Reuters sources indicate discussions among ECB policymakers about possibly lowering rates below the neutral level, signaling a more aggressive easing approach.
Meanwhile, the Pound Sterling (GBP) faces challenges from falling consumer and producer inflation rates and weak labor market data, leading to expectations of a 25-basis-point rate cut from the Bank of England (BoE) in November and December. BoE Governor Andrew Bailey recently stressed the need for improved oversight of the non-banking sector, highlighting a shift from rule-making to surveillance to monitor financial activities effectively.
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