GBP Steadies Against EUR as BoE Leaves Rates Unchanged

The British Pound (GBP) stabilized against the Euro (EUR) following the Bank of England's (BoE) decision to keep interest rates unchanged at 3.75%. The BoE's monetary policy statement noted that the energy shock's impact on the UK economy remains uncertain, and while monetary policy cannot influence energy prices, it aims to ensure a sustainable adjustment to achieve the 2% inflation target.

BoE Governor Andrew Bailey said UK economic activity is subdued, and the labour market is soft. However, he added that there is no evidence of second-round effects from higher energy prices so far, but it's too early to take much comfort from this.

The EUR/GBP pair traded almost flat on Thursday, hovering close to its highest level in nearly a month, as the GBP modestly outperformed the EUR. The BoE left the Bank Rate unchanged in a 6-3 vote, with all members agreeing that energy-price risks were tilted to the upside.