Euro Surges Past 0.8580 as Bank of England Leaves Rates Unchanged
The Euro rallied against the British Pound on Thursday after the Bank of England left interest rates unchanged. The EUR/GBP pair appreciated over 20 pips from daily lows, hitting session highs above 0.8580 and nearing two-month highs just above 0.8600.
The BoE's decision was expected, with three committee members calling for a quarter-point hike to 4% Bank Rate. However, Governor Andrew Bailey hinted at potential monetary tightening if the Middle East conflict persists, which failed to provide any support to the Pound.
Eurozone inflation remains a concern, with revised lower core inflation of 2.4% year-over-year and accelerated price pressures at 0.4% monthly growth in August. Analysts at ING caution that the BoE's dovish stance may translate into renewed currency softness, predicting a weaker sterling against the Dollar and Euro.