• EUR/GBP remains hovering around 0.8660, near one-month lows.
• The BoE left interest rates on hold, awaiting further data about the impact of the Middle East war.
• The ECB is also expected to stand pat on rates and hint at upcoming monetary tightening.

The Euro (EUR) shows marginal losses against the British Pound (GBP) on Thursday but remains trading within the last few days’ range around 0.8660, lacking any clear bias. The Bank of England’s (BoE) monetary policy decision has gone practically unnoticed, and the time is now for the European Central Bank (ECB).

The BoE left its benchmark interest rate unchanged at 3.75% as widely expected on Thursday. The committee approved the decision by 8 votes to 1, with policymakers borrowing time to better assess the economic consequences of the US-Iran war. Governor Andrew Bailey will provide further details at a press conference, due in a few minutes.

The focus shifts now to the European Central Bank, which is seen leaving its Rate on Deposit Facility unchanged at the current 2%, although, in this case, President Christine Lagarde is expected to hint at a rate hike over the coming months.

Eurozone's Preliminary Harmonised Index of Consumer Prices (HICP) figures, released earlier on Thursday, confirmed the inflationary impact of the energy shock from the Iran war. The HICP accelerated to a 3% yearly rate, its highest level since September 2023, adding pressure on the central bank to tighten its monetary policy.

The bank, however, faces a challenging scenario, as the Gross Domestic Product (GDP) figures released by Eurostat revealed that economic growth slowed down in Q1, which will compel policymakers to fine-tune monetary policy to be able to fight inflation without crushing an ailing growth.