The pound euro (GBP/EUR) exchange rate is rising for a fourth day.
The pound is strengthening amid a risk-on market mood, as evidenced by the FTSE 100 reaching a record high on strong corporate earnings and mining stocks.
Falling UK inflation expectations and Andrew Bailey’s testimony yesterday have reinforced expectations of a Bank of England rate cut as early as March.
Political focus remains on the upcoming Gorton and Denton by-election.
The euro is weakening after eurozone inflation was confirmed to have cooled to a 16-month low of 1.7%, below the ECB’s target 2% level for the first time since May 2025, reinforcing expectations that the central bank will keep interest rates unchanged this year.
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