POUND STERLING STRENGTHENS AND SURGES AGAINST EURO – Policymakers gear up to lower interest rates to support the European economy
The pound has climbed to its highest level against the euro in two and a half years, as policymakers gear up to lower interest rates to support the struggling European economy.
Sterling has gained strength amid expectations that the Bank of England will hold interest rates steady at its meeting next week, keeping borrowing costs higher than those in the eurozone.
The euro has weakened to 82.5p, its lowest value since April 2022, as the European Central Bank (ECB) is anticipated to cut borrowing costs tomorrow.
Markets predict the ECB will lower interest rates by 152 basis points by the end of next year—equivalent to six quarter-point reductions—bringing rates down from 3.25% to around 1.75%.
In contrast, traders expect the Bank of England to cut interest rates only three times within the same period, reducing rates from 4.75% to 4%.
