EUR/GBP hits yearly highs amid UK political tensions and BoE rate-cut bets
|- EUR/GBP hits fresh yearly highs as UK political uncertainty and BoE rate-cut expectations weigh on the Pound.
- Steady German inflation and hawkish ECB tone support the Euro’s relative strength against the Pound.
- Markets eye key data ahead, including UK GDP and Eurozone Industrial Production, for near-term direction.
The Euro (EUR) extends gains against the British Pound (GBP) on Wednesday as the Sterling weakens across the board following reports of growing tension within the UK Labour Party and speculation over Prime Minister Keir Starmer’s leadership, which has added to political uncertainty ahead of this month’s budget.
At the time of writing, EUR/GBP is trading around 0.8836, marking fresh year-to-date highs and its strongest level since April 21, 2023.
According to recent media reports, allies of Prime Minister Keir Starmer have warned that any move to challenge his leadership would be “reckless,” amid rumours of internal divisions and weakening public support. The uncertainty comes just days before the November 26 budget, with investors increasingly concerned that fiscal tightening and potential tax hikes could weigh on the UK’s growth outlook.
On the macro front, weak labour market data released on Tuesday has reinforced expectations that the Bank of England (BoE) will lower interest rates at its December meeting. According to a Deutsche Bank report, the probability of a BoE rate cut jumped from 72% at Monday’s close to around 86% on Tuesday.
On the Euro side, data from Germany showed that inflation held steady in October. The Harmonized Index of Consumer Prices (HICP) rose 0.3% MoM and 2.3% YoY, both in line with expectations.
Meanwhile, hawkish comments from European Central Bank (ECB) policymaker Isabel Schnabel added to the Euro’s relative strength, as she noted that the economy still shows “positive underlying momentum” and that “services inflation remains sticky.” Schnabel further said interest rates are “absolutely in a good place” but warned that inflation risks are “tilted slightly to the upside,” signaling that the ECB is comfortable keeping rates unchanged for the foreseeable future.
Looking ahead, traders brace for a slew of key economic releases on Thursday, including the UK’s preliminary third-quarter Gross Domestic Product (GDP), Industrial Production, and Manufacturing Production figures. The Eurozone will also publish Industrial Production data for September
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | 0.49% | 0.51% | 0.08% | -0.07% | -0.04% | -0.26% | |
| EUR | -0.09% | 0.40% | 0.43% | -0.01% | -0.16% | -0.13% | -0.35% | |
| GBP | -0.49% | -0.40% | 0.02% | -0.41% | -0.56% | -0.53% | -0.75% | |
| JPY | -0.51% | -0.43% | -0.02% | -0.44% | -0.59% | -0.57% | -0.78% | |
| CAD | -0.08% | 0.00% | 0.41% | 0.44% | -0.15% | -0.13% | -0.34% | |
| AUD | 0.07% | 0.16% | 0.56% | 0.59% | 0.15% | 0.03% | -0.20% | |
| NZD | 0.04% | 0.13% | 0.53% | 0.57% | 0.13% | -0.03% | -0.22% | |
| CHF | 0.26% | 0.35% | 0.75% | 0.78% | 0.34% | 0.20% | 0.22% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.