The pound euro (GBP/EUR) exchange rate is falling for a fifth straight day.
The pound is edging lower ahead of tomorrow’s BoE decision, where rates are expected to remain at 3.75% as rising inflation concerns have ruled out a near-term cut.
Elevated oil prices are fuelling stagflation risks, with weak growth and sticky inflation weighing on the outlook. The markets are now shifting toward pricing a potential rate hike by year-end.
The euro is slightly firmer after inflation rose to 1.9% YoY in February, up from 1.7% in January.
However, the data is already outdated, as it doesn’t account for the recent spike in oil prices.
The ECB is expected to hold rates steady and maintain a cautious, data-dependent stance.