The EUR/GBP currency pair held within a tight daily range on Thursday ahead of the outcome of the European Central Bank’s and the Bank of England’s policy meetings.
The European Central Bank is largely expected to keep its main refinancing operations rate intact at 2.15% at its March 19th meeting.
And, the ECB deposit facility rate is expected to be kept at 2.00%.
ECB President Christine Lagarde had said that monetary policy was in a “good place” and played down concerns that a stronger Euro could pose a risk to the inflation outlook.
Lagarde’s remarks suggested that interest rates were likely to remain steady for the foreseeable future.
The ECB President also warned that inflation figures could move unevenly in the coming months, but emphasized that policy decisions should not be driven by any single release of data.
Meanwhile, the Bank of England is expected to leave its benchmark interest rate intact at 3.75% at its March 19th meeting.
BoE’s February decision to hold rates was a narrow 5 to 4 vote, as officials weighed easing inflation pressures against risks stemming from a weakening economy. Four members voted in favor of a 25 basis point cut, which highlighted growing divisions within the Monetary Policy Committee.
BoE policy makers said that risks of persistent inflation had decreased, while weaker demand and a softening labor market posed downside risks.
The MPC indicated that further rate cuts were likely, but they would depend on incoming inflation figures. BoE Governor Andrew Bailey expressed confidence that inflation would reach the 2% target sooner than previously thought.
The EUR/GBP currency pair was last up 0.06% on the day to trade at 0.8642.
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