British Pound Could Weaken Against Euro if BoE Holds Rates; Rabobank Forecasts GBP/EUR at 0.87 in 1-3 Months

According to analyst Jan Foley at Rabobank, the British pound could weaken against the euro as the Bank of England is unlikely to raise interest rates this year and UK political uncertainty persists. The bank forecasts the euro-to-pound exchange rate to reach 0.87 within the next one to three months, from its current level of 0.8610. Foley noted that the BoE would only consider rate hikes if evidence emerges of second-round inflation effects from sustained high energy prices, while ongoing political uncertainty may damage business confidence and economic growth.
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