The EUR/GBP cross continues to lose ground for the third consecutive session, trading around 0.8570 during the European session on Thursday.
EUR/GBP extends losing streak on growing expectations of BoE delaying rate cuts. The gains in the UK 10-year yield enhanced the hawkish expectations for the BoE’s stance on monetary policy. ECB's Schnabel noted that the last phase of reaching Eurozone inflation of 2% could be challenging. The Pound Sterling is finding support as the markets anticipate that the Bank of England will likely wait until the next quarter to lower borrowing costs, according to median forecasts in a Reuters poll.
The dovish stance of the ECB is exerting some selling pressure on the Euro and creating headwinds for the EUR/GBP cross. Furthermore, ECB board member Isabel Schnabel said at a conference on Thursday that the final stage of achieving Eurozone inflation of 2% may encounter obstacles, with erosion in productivity and high service costs posing clear risks.
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