The pound euro (GBP/EUR) exchange rate is falling to a fresh multi-year low.
The pound slumped across the board after Chancellor Rachel Reeves spoke, paving the way for tax hikes ahead of the November Budget.
Amid rising expectations of tax hikes and cooler-than-forecast inflation, the BoE could cut rates sooner, with markets pricing in a 30% chance of a November cut.
The euro is rising against the pound but weakened versus the dollar amid a quiet economic calendar. The ECB kept rates at 2% last week and is unlikely to cut further unless there are substantial data surprises. Eurozone services and composite PMI data is due tomorrow.