EUR/GBP softens below 0.8850 despite growing expectations of BoE rate cut

The EUR/GBP cross loses momentum to near 0. 8820 during the early European session on Thursday. Nonetheless, the potential downside for the cross might be limited, as weakening UK economic data have increased expectations for a Bank of England (BoE) interest rate cut in December. The German Producer Price Index (PPI) and Eurozone Consumer Confidence reports will be released later on Thursday. Recent weak UK economic data, such as Consumer Price Index (CPI) inflation, disappointing GDP and Industrial Production readings, have boosted BoE rate cut bets in the December meeting. The Office for National Statistics (ONS) revealed on Wednesday that the UK headline inflation fell to 3. 6% YoY in October, as expected, from 3. 8% in September. Additionally, uncertainty and pessimism surrounding the UK’s autumn budget could weaken sentiment towards the Pound Sterling against the Euro. The upcoming government budget on November 26 is also expected to influence the BoE’s next move. While the BoE is facing pressure to reduce the interest rates, the European Central Bank (ECB) maintains a more cautious stance, which provides some support to the EUR. According to a majority of economists polled by Reuters, the ECB will hold interest rates at least until the end of 2026. The case for a longer pause has increased since the ECB last reduced the key interest rates in June, with inflation hovering around the 2% target, GDP stable, and the unemployment rate staying at an all-time low.
https://bitcoinethereumnews.com/finance/eur-gbp-softens-below-0-8850-despite-growing-expectations-of-boe-rate-cut/