GBP/EUR: Pound Flat vs. Euro Following BoE & ECB

The pound euro (GBP/EUR) exchange rate is edging higher after 4-days of losses.

The pound fell yesterday after the BoE raised interest rates by 0.5%, as forecast, but hinted towards a slower pace of hikes going forwards. The central bank lowered its inflation forecast to 4% in 2023.

Attention will now turn to UK services PMI which is forecast to confirm the preliminary 48 level.

The euro jumped after the ECB hiked interest rates by 0.5% and indicated that more rate hikes were to come. Another 0.5% hike is expected in March although the outlook thereafter is not clear.

The ECB offered mixed messages on the future path of hikes.

Eurozone composite PMI data is due to be released