The pound euro (GBP/EUR) exchange rate is rising, reaching €1.2150, a 2.5 year high.
The pound is rising on expectations that the BoE will leave interest rates unchanged at 4.75% in December and will cut rates at a slower pace.
The market has lowered rate cut expectations after the new government’s Budget, which is inflationary.
The euro is under pressure ahead of the ECB rate decision. The ECB is expected to cut rates by 25 basis points tomorrow and 150 basis points before the end of next year.