UK inflation data fails to shift EUR/GBP as benign food prices and modest services inflation keep BoE rate expectations stable.
The British pound remained resilient after July’s UK Consumer Price Index (CPI) data, with EUR/GBP unchanged near 0.8550. Food inflation stayed subdued, while the Bank of England’s core services inflation measure rose slightly to 3.8% year-on-year, below levels likely to prompt further hikes.
Analysts noted the BoE may not need additional tightening, though sterling’s reaction could be delayed until later in the year. In a low-volatility environment, the currency continues to benefit from strong carry appeal, ranking among the highest in G10 on a volatility-adjusted basis.
Markets showed little immediate reaction to the data, with EUR/GBP expected to maintain current levels in the near term.