Euro weakens against British Pound as Bank of England rate hike bets rise

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EUR/GBP trades near a one-year low as higher UK interest rate expectations support the Pound.
Markets fully price a BoE rate hike by November, while another near-term ECB increase appears unlikely.
Attention turns to Thursday’s UK GDP and production data for fresh clues on the BoE’s policy path.

EUR/GBP stays under pressure as reduced political uncertainty in the United Kingdom and expectations of higher Bank of England (BoE) interest rates keep the British Pound (GBP) favoured over the Euro (EUR). At the time of writing, the cross trades around 0.8509, near its lowest level since June 2025.

Oil-driven inflation risks are back in focus after renewed fighting between the United States and Iran disrupted supplies through the Strait of Hormuz. The rebound in energy prices has raised expectations that the BoE may need to tighten monetary policy.

Reuters reported that money markets fully price a BoE rate hike by November, with a second increase expected by March 2027. The BoE currently holds its Bank Rate at 3.75%.

Meanwhile, the European Central Bank (ECB) raised its Deposit Facility Rate by 25 basis points to 2.25% in June in response to surging Oil prices. However, markets see little chance of another increase in the near term, although a further rate hike by year-end remains possible.

Bundesbank President Joachim Nagel said on Wednesday that ECB interest rates are at an appropriate level following the June decision. He added that policymakers should respond cautiously but act decisively if needed.

ECB policymaker Fabio Panetta said Eurozone inflation is hovering around 3% and is expected to stay above that level until early 2027. He added that future rate decisions should focus on keeping inflation expectations anchored and limiting the indirect and second-round effects of energy shocks.

The wide gap between UK and Eurozone interest rates should keep EUR/GBP tilted to the downside in the near term. Attention now turns to the UK Gross Domestic Product (GDP), Industrial Production and Manufacturing Production data due on Thursday for fresh clues on the economic outlook and the BoE’s interest rate path.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Swiss Franc.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.06%	-0.21%	-0.02%	-0.03%	-0.27%	-0.28%	0.01%
EUR	0.06%		-0.21%	0.04%	0.02%	-0.25%	-0.28%	0.06%
GBP	0.21%	0.21%		0.22%	0.21%	-0.05%	-0.08%	0.26%
JPY	0.02%	-0.04%	-0.22%		-0.00%	-0.25%	-0.27%	0.03%
CAD	0.03%	-0.02%	-0.21%	0.00%		-0.24%	-0.31%	0.04%
AUD	0.27%	0.25%	0.05%	0.25%	0.24%		-0.05%	0.27%
NZD	0.28%	0.28%	0.08%	0.27%	0.31%	0.05%		0.34%
CHF	-0.01%	-0.06%	-0.26%	-0.03%	-0.04%	-0.27%	-0.34%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

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