EUR/GBP moved lower on the announcement with the hawkish vote split taking centre stage. The still cautious guidance delivered today highlights the more gradual approach of the BoE, Danske Bank's analyst Kirstine Kundby-Nielsen reports.
EUR/GBP to move lower in the coming quarters
"More broadly, we expect EUR/GBP to move lower in the coming quarters driven by a relatively hawkish BoE compared to G10 peers, an investment environment characterised by continued tight credit spreads and a positive correlation for GBP to a USD positive investment environment (which we expect will return)."
"While we continue to expect a growth pickup in the UK delivered from a fiscal boost, the shift in fiscal stance in Germany leaves the impact from the relative growth outlook more muted for the cross. The key risks are reignited debt concerns and a more forceful policy easing stance from the BoE."
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