The EURGBP consolidates around the 0.8800 level, just below Wednesday's one-month high

During the early European session, the EURGBP cross is anticipated to oscillate around the 0.8800 round-figure level, holding the overnight gains to a nearly one-month high.

The Bank of England's pessimistic prognosis for the UK economy proves to be a major contributor to the British Pound's relative underperformance and provides support for the EURGBP cross. In reality, the central bank of the United Kingdom anticipates a recession to persist throughout 2023 and the first half of 2024. In addition, the BoE signaled last week a smaller terminal high than the markets had anticipated.

In contrast, the common currency continues to receive some support from wagers on a more aggressive policy tightening by the European Central Bank (ECB). Several ECB policymakers, including President Christine Lagarde, have signaled that the central bank will continue aggressively hiking interest rates to combat soaring consumer inflation, which reached a record 10.7% in October.

This, in turn, drove Germany's short-term rates to fresh multi-year highs earlier this week, lending credence to the EURGBP cross's near-term bullish tilt. Even from a technical standpoint, the previous day's prolonged movement and acceptance above the 0.8775-0.8780 supply zone bolster the likelihood of a continuation of the roughly three-week-old uptrend.

There are no major market-moving economic reports scheduled for release on Thursday from either the Eurozone or the United Kingdom. Thus, the attention remains on Friday's preliminary GDP report for the UK's third quarter. The November 17 fiscal update by British Finance Minister Jeremy Hunt will also be anticipated by investors. Nonetheless, the fundamental environment appears favorable for optimistic traders.