Pound drops against Euro as BOE and ECB policies diverge
According to ING, the Sterling’s vulnerability against the euro may be heightened due to diverging monetary policy between the Bank of England (BOE) and the European Central Bank (ECB). The BOE’s recent Decision Maker Panel survey suggested that firms expect slower growth in prices and wages. This, coupled with the fact the ECB appears more committed to raising interest rates, could see the sterling weaken further against the euro. In addition, unstable risk sentiment may also impact the sterling harder than the euro, warns ING. Meanwhile, Rightmove PLC sees further growth in revenue per advertiser for 2023 despite an expected downgrade in margin outlook.
– The BOE recently kept interest rates at 0.1% but hinted at possible rate hikes in the future.
– The ECB is expected to raise rates in 2022, although the timing is uncertain.
– Rightmove reported a pretax profit increase of 6.9% for 2022.
– Avation PLC swung to a pretax profit for H1 of fiscal 2023 and will focus on leasing greener aircraft.
– Pearson PLC saw pretax profit and revenue increase for 2022 due to strong momentum and progress on strategic initiatives.
– Cordel Group PLC’s CFO Robert Lojszczyk has retired, and Thuraya Walker has been appointed his successor.
The diverging monetary policies of the BOE and ECB could leave sterling vulnerable against the euro. While the BOE may hike rates in March, the ECB appears more committed to raising rates in 2022. Additionally, unstable risk sentiment may impact the sterling more heavily than the euro.
Investors and traders should keep an eye on possible interest rate raises by the BOE and ECB, as well as unstable risk sentiment, which may affect the performance of the sterling against the euro.