At today’s monetary policy meeting, the Bank of England (BoE) left the key policy rate unchanged at 5.25%. EUR/GBP ended the meeting higher. Economists at Danske Bank analyze Sterling’s outlook.
BoE paves the way for more EUR/GBP topside
As expected, the BoE decided to keep the Bank Rate (key policy rate) unchanged at 5.25% whilst maintaining a data dependent forward guidance.
We continue to see relative rates as a moderate positive for EUR/GBP with room for further cuts being priced in for 2024.
We still expect the relative performance of the Euro area and the UK economy to be a relevant driver.
We target a modest rise in EUR/GBP to 0.89 in 2024.
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