EUR/GBP dips back under 0.8350 as risk appetite firms, pound remains resilient to domestic political noise By Frank_Macro EURGBP BOE ECB RiskAppetite
by a substantial margin when it comes to monetary policy normalisation and it perhaps unsurprising to see EUR/GBP come under pressure. All signs, including recent upside inflation and labour market data surprises and business surveys that have highlighted inflationary/tight labour market concerns, point to the BoE hiking interest rates again next week . Indeed, the British public’s 12-month inflation expectation hit a record high of 4.8% in January according to the latest YouGov/Citi poll.
For reference, UK PM Boris Johnson appears on the verge of losing his job as the “partygate” scandal escalates . Much will depend on the highly anticipated Sue Gray report, which will be handed to the PM on Wednesday and apparently will not be goodfor the PM. “While most Tory MPs have pledged to wait for the result of the investigations before moving to vote out Johnson, there now appears more consensus that the PM's tenure is close to its end,” said analysts at ING.
stance for the moment, any change at the helm of the government should have a limited impact on the pound” they add.