- Pound (GBP) is unchanged and moves in a tight range
- BoE policymakers offer mixed signals
- Euro (EUR) is flat despite hawkish ECB rhetoric
- France’s National Assembly passed next year’s Social Security Bill
The Pound-Euro (GBP/EUR) exchange rate is unchanged after two days of losses. The pair fell +0.02% in the previous session, settling on Tuesday at €1.1437. It traded between €1.1431 and €1.1468. At 12:00 UTC, GBP/EUR trades +0.01% at €1.1440.
The pound is barely moving on Wednesday after a flat few days amid caution following the post-Budget Relief rally, as attention turns to the Bank of England rate decision next week.
Senior Bank of England policymakers spoke in different tones yesterday, highlighting the divergence within the Monetary Policy Committee ahead of the rate decision.
Claire Lombardelli, the deputy governor, said she was more concerned about upside risks to inflation and considered that the central bank could be near the end of its interest rate cycle. She was among the slim majority of MPC rate setters who voted 5 to 4 to keep interest rates on hold last month.
Meanwhile, Dave Ramsden, deputy governor for markets and banking, voted to cut rates in November. He said yesterday that he saw no evidence that inflation would not fall as the central bank expects.
The euro is holding steady after firmer rhetoric from ECB officials and progress on France’s Social Security budget for 2026.
ECB governing council member Simkus told Bloomberg that he did not see the need for a further rate cut by the central bank, given that inflation was more or less at the target level. His comments echoed those from Isabel Schnabel earlier in the week.
Separately, in France, political risk eased after the National Assembly passed next year’s Social Security bill by a narrow margin of just 13 votes. However, the wind offers a temporary boost to local news; minority government attention now turns towards the still-uncertain passage of the broader state budget.
