EUR/GBP drifting back down as UK inflation data casts doubts on BOE rate shift tomorrow

The reaction in the EUR/GBP to the higher levels of UK inflation last month has not exactly been dynamic. However, it has dropped back from above 0.8450 this morning and that fall tends to endorse the outlook for the BOE to keep rates on hold tomorrow. Of course that is by no means a done deal and there is still the prospect they might lower interest rates ahead of what is expected to be a tax-raising budget at the end of next month. On the other side of that argument, it is surely hard for any Central Bank to justify lowering interest rates at the same time as Inflation is on the rise again and also remains stubbornly above their target. This probably explains why the EUR/GBP is edging back down this morning, currently at, or near session lows, around 0.8434