Economists at ING analyze EUR/GBP outlook.
Volatile pricing ahead of PMIs
Bank of England rate expectations have been volatile since last week’s upside surprise on wages and CPI. Retail sales on Friday missed the highest bank rate expectations measured as a cut in Sony’s rate by more than 10 bps. The market is currently looking at 5.95-6.0%, but today’s PMI release in the UK could set prices again.
EUR/GBP can make another attempt at breaking 0.8500 today, although the sustainability of sub-0.8500 levels is questionable unless markets price in more rate hikes in the UK or price out tightening in the Eurozone.
