EUR/GBP is pressing lower again. Economists at ING analyze the pair’s outlook.

Hard to buck the Sterling bullish trend

A move below the 0.8540 support would set the EUR/GBP pair back to pre-Mini-Budget crisis levels (August 2022).

The latest evidence from employment and wage growth has prompted yet another repricing higher in BoE rate expectations, with 132 bps of tightening priced in by year-end.

With short-dated gilts reaching their highest levels since 2008 yesterday, it remains hard to buck the EUR/GBP bearish trend, especially ahead of the ECB risk event, but our medium-term view remains bullish on the pair.