EUR/GBP rallies to near 0.8380 as UK Inflation decelerates


  • EUR/GBP rises strongly to near 0.8380 as soft UK inflation prompts BoE dovish bets.
  • UK service inflation slowed to 4.9% and the core CPI decelerated to 3.2% in September.
  • The ECB is expected to reduce its key borrowing rates further by 25 bps on Thursday.

The EUR/GBP pair surges to near 0.8380 in Wednesday’s European session. The cross strengthens after the release of the United Kingdom (UK) Consumer Price Index (CPI) report for September, which showed that price pressures grew at a slower-than-expected pace.

Signs of inflationary pressures taming have prompted expectations of more interest rate cuts by the Bank of England (BoE) in the remaining year.

The CPI report showed that the annual headline inflation decelerated to 1.7%, below the bank’s target of 2%. Month-on-month headline CPI remained flat, which was expected to hardly grow. Annual core CPI – which excludes volatile items – rose by 3.2%, slower than estimates of 3.4% and the former release of 3.6%.

Meanwhile, inflation in the services sector also slowed sharply due to lower wage growth. The Service inflation, a closely watched indicator by BoE officials, grew by 4.9%, slower than 5.6% in August.

The Pound Sterling (GBP) was underperforming against its major peers from a few days after BoE Governor Andrew Bailey’s interview with the Guardian newspaper in which his comments were a bit dovish on the interest rate outlook. Bailey said the BoE could become "a bit more activist" and "a bit more aggressive" in its approach to lowering rates if there was further welcome news on inflation for the central bank, Reuters reported.

On the Euro (EUR) front, investors await European Central Bank (ECB) President Christine Lagarde’s speech for fresh guidance on interest rates, which is scheduled at 19:40 GMT. However, ECB Lagarde is unlikely to provide any guidance on interest rates due to the ECB's quiet period ahead of the policy meeting on Thursday. The ECB is expected to cut the rate on the Deposit Facility by 25 basis points (bps) to 3.25%. This will be the second straight interest rate cut by the ECB as price pressures in the Eurozone have eased significantly. 

According to revised estimates, the annual CPI (EU norm) in France slowed to 1.4% in September from expectations and the prior estimates of 1.5%.

 

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

XM
Account
7.2
Tools
9.2
Service
9.4
Trading
9.0
Trust
7.0
Experience
8.4
Read review
Moneta Markets
Account
7.4
Tools
6.6
Service
8.0
Trading
6.6
Trust
5.2
Experience
9.2
Read review
Trading Pro
Account
7.2
Tools
5.2
Service
6.6
Trading
8.0
Trust
5.0
Experience
7.0
Read review
Pepperstone
Account
8.2
Tools
8.2
Service
7.4
Trading
9.0
Trust
8.8
Experience
9.0
Read review
XM
Read review
Moneta Markets
Read review
Trading Pro
Read review
Pepperstone
Read review
Trading Pro
Read review
Pepperstone
Read review
XM
Read review
Moneta Markets
Read review
Trading Pro
Account
7.2
Tools
5.2
Service
6.6
Trading
8.0
Trust
5.0
Experience
7.0
Read review
Pepperstone
Account
8.2
Tools
8.2
Service
7.4
Trading
9.0
Trust
8.8
Experience
9.0
Read review
XM
Account
7.2
Tools
9.2
Service
9.4
Trading
9.0
Trust
7.0
Experience
8.4
Read review
Moneta Markets
Account
7.4
Tools
6.6
Service
8.0
Trading
6.6
Trust
5.2
Experience
9.2
Read review

Recommended content


Recommended content

Editors’ Picks

EUR/USD soars past 1.1200 as China's tariffs confirmed at 145%

EUR/USD soars past 1.1200 as China's tariffs confirmed at 145%

EUR/USD soared beyond 1.1200 amid headlines confirming the latest round of tariffs, levies on Chinese imports reached 145%. Wall Street collapses amid renewed concerns that Trump's policies will hit the American economy. Soft US inflation data released earlier in the day adds to the broad US Dollar's weakness. 

 

EUR/USD News
GBP/USD closes in to 1.3000 on renewed USD selling

GBP/USD closes in to 1.3000 on renewed USD selling

GBP/USD resumed its advance and nears the 1.3000 mark, as speculative interest resumed US Dollar selling. Softer than anticipated US CPI figures and persistent tensions between Washington and Beijing over trade weigh on the American currency and Wall Street. 

GBP/USD News
Gold resumes record rally, reaches $3,175

Gold resumes record rally, reaches $3,175

Gold extended its record rally on fresh tariff-related headlines, trading as high as $3,175 a troy ounce in the American session. The White House confirmed 35% levies on Mexico and Canada, 145% on Chinese imports, resulting in a fresh round of USD selling and pushing XAU/USD further up.

 

Gold News
Cardano stabilizes near $0.62 after Trump’s 90-day tariff pause-led surge

Cardano stabilizes near $0.62 after Trump’s 90-day tariff pause-led surge

Cardano stabilizes around $0.62 on Thursday after a sharp recovery the previous day, triggered by US Donald Trump’s decision to pause tariffs for 90 days except for China and other countries that had retaliated against the reciprocal tariffs announced on April 2.

Read more
Trump’s tariff pause sparks rally – What comes next?

Trump’s tariff pause sparks rally – What comes next?

Markets staged a dramatic reversal Wednesday, led by a 12% surge in the Nasdaq and strong gains across major indices, following President Trump’s unexpected decision to pause tariff escalation for non-retaliating trade partners. 

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025