The EUR/GBP pair experienced a decline to approximately 0.8590 during the early European trading session on Thursday, reflecting a 0.44% decrease. This movement occurs as the European Central Bank (ECB) is widely anticipated to implement a 25 basis point (bps) rate cut, potentially lowering the key interest rate to 2.25%. Concerns regarding tariff-related economic slowdown are contributing factors to this expectation.
Recent economic data indicates a decrease in UK inflation to 2.6% year-over-year in March, strengthening the argument for a potential rate reduction by the Bank of England (BoE). Market analysts suggest the possibility of further ECB rate cuts in the near future, with some anticipating a subsequent 25 bps reduction in June. The aforementioned UK inflation data, released by National Statistics, exceeded expectations and supports the likelihood of a BoE rate cut to 4.25% in the coming month.
