EUR/GBP set to move higher as the BoE communication fails to live up to market expectations – Danske Bank

Economists at Danske Bank analyze EUR/BP outlook ahead of the Bank of England (BoE) meeting.

Look to sell GBP on aggressive BoE pricing

In our base case of a 25 bps hike, we expect EUR/GBP to move higher. 

While we expect the BoE to highlight that inflation has proven more persistent than previously expected, we believe that they will fail to live up to market expectation of a hawkish pivot. 

On balance, we increasingly see relative rates as a positive for EUR/GBP from here, which is one of several reasons behind our fundamental predisposition to buying EUR/GBP dips.

See – BoE Preview: Banks expect 25 bps, door open to further hikes