GBP Edges Higher Amid Rising Oil Prices and BoE Hike Bets

The Pound-Euro exchange rate has edged higher on Tuesday as oil prices rise and inflation data from the Eurozone prompts markets to rethink central bank expectations.

At the current rate, GBP/EUR is trading at €1.1677, a 0.15% increase on the day. This comes as UK government bond yields have jumped to their highest level since 2008, with market pricing in around 32 basis points of tightening from the Bank of England (BoE) by the end of the year.

A November rate hike is now seen as almost 70% likely, with a second increase by February priced at roughly 80%. This has lent some support to the Pound, although its upside is capped by concerns around higher government borrowing costs and their impact on the UK economy.