The pound euro (GBP/EUR) exchange rate is rising, adding to last week’s gains, and has reached a 5-month high.
The pound is being lifted by expectations that the BoE will cut interest rates after the ECB, given that UK inflation is still double the central bank’s 2% target.
The central bank’s interest rate decision is on Thursday.
The euro has fallen in recent weeks as the market believes that the ECB will be among the first major central banks to cut interest rates.
Concerns over the outlook for the economy and cooling inflation sees the market considering a March rate cut as possible despite the ECB not mentioning rate cuts at the meeting last week.
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