Euro Surges Past Pound as BoE Keeps Rates Unchanged Amid Hawkish Tone

The Euro (EUR) surged against the British Pound (GBP) on Thursday after the Bank of England's (BoE) decision to leave interest rates unchanged at 3.75%. This move, while expected by many, had a mixed impact on currency markets. The EUR/GBP pair climbed more than 20 pips from daily lows and hit session highs above 0.8580, nearing two-month highs just above 0.8600.

BoE Governor Andrew Bailey did not speak to the press after the decision, but minutes of the meeting showed a somewhat hawkish tone. He acknowledged that the bank might have to tighten its monetary policy if the Middle East conflict persists and second-round effects emerge.

However, these comments failed to provide support for the Pound. The Eurozone inflation rate was revised lower, with price pressures accelerating at 0.4% in August from July's 0.2% reading.