EUR/GBP stalls below 0.8800, awaiting ECB and BoE decisions

• EUR/GBP bounced up from 0.8745, but remains capped below 0.8800.
• Cooling UK inflation figures have boosted hopes of a BoE rate cut later today.
• The ECB will, highly likely, stand pat and signal a steady policy for the foreseeable future.

The Euro bounced up from the mid-range of the 0.8700s, and maintains a moderately bid tone in the British Pound on Thursday. Euro bulls, however, remain capped below the 0.8785-0.8795 area with investors looking from the sidelines ahead of monetary policy decisions by the ECB and the BoE.

The Pound came under pressure on Wednesday following a sharper-than-expected decline in UK consumer prices, which strengthened the case for a BoE rate cut later today, and fed hopes for further monetary easing down the road.

The Bank of England is widely expected to cut its Bank Rate by 25 basis points to 3.75% later on Wednesday, amid a deeply divided Monetary Policy Committee. A sticky inflation has forced the BoE to keep its benchmark relatively high compared to most of the world's major central banks, but Wednesday's CPI data cemented hopes for at least another quarter-point rate cut in 2026.

Across the channel, the ECB is expected to keep rates on hold for the fourth consecutive meeting. The main attraction of the event will be on the bank’s growth forecasts and President Christine Lagarde’s comments to assess the chances of a rate hike next year.