The Euro (EUR) trades flat against the British Pound (GBP) on Thursday after a sharp slide on Wednesday following the United Kingdom’s Autumn Budget. At the time of writing, EUR/GBP is trading near 0.8761, holding close to a one-month low as sentiment continues to favour Sterling.
The Euro is finding some support from the latest European Central Bank (ECB) minutes, which showed unanimous backing for leaving all three key policy rates unchanged in October. The Governing Council described the policy stance as “in a good place” and highlighted the value of waiting for December’s updated projections before considering any further adjustments.
The minutes also reaffirmed that inflation is broadly moving toward the 2% target, while domestic demand and labour-market conditions remain reasonably resilient.
At the same time, policymakers noted that inflation risks remain two-sided, with members split on whether the cutting cycle has effectively ended or if additional easing might be required in 2026 should downside risks intensify.
The minutes further highlighted that markets have “almost fully priced out” any additional rate cut in 2025, while the OIS curve assigns only around a 40% probability of one more reduction by the end of 2026.
On the data front, Eurozone sentiment figures released earlier in the day painted a mixed but steady picture. The Economic Sentiment Indicator for November came in at 97, matching the market forecast of 97 and slightly above October’s 96.8. The Business Climate Index slipped to 0.66 from -0.47. Consumer Confidence was unchanged at -14.2, matching both forecasts and the October reading.
Meanwhile, the UK’s new Autumn Budget under Chancellor Rachel Reeves highlighted an increase in fiscal headroom that exceeded expectations. According to the Office for Budget Responsibility’s (OBR) latest economic and fiscal outlook, the government is projected to run a current budget surplus margin of £21.7 billion in 2029-30, compared with £9.9 billion in the March forecast.
Looking ahead, traders will shift their attention to comments from Bank of England (BoE) policymaker Megan Greene, who is scheduled to speak later on Thursday. Her remarks will be assessed for any guidance on the policy path, as markets have grown more confident in recent weeks that the BoE could move toward a rate cut in December.
