GBP/EUR Exchange Rate Supported by BoE Hike Bets Amid Oil Price Surge

The Pound-Euro exchange rate has seen modest gains this week due to increasing expectations of a Bank of England (BoE) interest rate hike.

At the time of writing, the GBP/EUR exchange rate was trading at around €1.1661, up approximately 0.3% from Monday's session start.

The BoE's potential rate hike is attributed to remarks made by Governor Andrew Bailey last week, where he suggested that inflationary pressures linked to strong energy prices will make it challenging for the bank to maintain its current stance on policy.

This is compounded by the recent jump in oil prices, with Brent benchmarks rising nearly 4% to over $108 a barrel after US President Donald Trump rejected a proposal by Iran to reopen the Strait of Hormuz.