EUR/GBP dips to 0.8750 session lows following BoE’s decsion

• EUR/GBP extends its reversal from levels close to 0.8800 to session lows near 0.8750.
• The BoE cut its Bank Rate to 3.75% with four policymakers voting against it.
• The ECB is widely expected to keep its benchmark interest rate unchanged at 2%

The Euro accelerated its decline from levels near 0.8800 against the Pound Sterling, to reach intra-day lows near 0.8750 at the time of writing, with the weekly low of 0.8745 at a short distance.

The Bank of England met the market’s expectations and cut its Bank Rate by 25 basis points to 3.75% on Thursday, amid a widely split monetary policy committee, with four policymakers calling for keeping rates on hold, and Governor Andrew Bailey tipping the scales towards the dovish side.

The minutes of the meeting observe that inflation has receded since the previous meeting and state that the committee expects consumer inflation to retreat further towards the 2% rate. The extent of further monetary easing, according to the minutes, will depend on the evolution of the outlook for inflation.

Later on, the European Central Bank is widely expected to leave its benchmark interest rate steady, at the current 2% level. Investors will be looking at the bank’s growth forecast for hints about the chances of a rate hike in 2026.