The EUR/GBP exchange rate oscillates at 0.8370 as investors await BOE policy decisions

During the Asian session, the EUR/GBP exchange rate fluctuates between 0.8366 and 0.8374. As investors anticipate the announcement of the Bank of England's interest rate decision, the cross is expected to stay inactive (BOE).

According to market forecasts, the BOE will announce a 50 basis point rate rise (bps). BOE Governor Andrew Bailey will announce a rate increase of 0.5 percentage points, bringing the interest rate to 1.75 percent. Notably, pricing pressures in the United Kingdom region have increased to 9.4 percent. In addition, the inflation rate has not yet showed signs of weariness, indicating that the new normal rate rise of 50 basis points is insufficient to counteract the growing inflationary pressures.

The dismal economic statistics and political turmoil following the departure of UK Prime Minister Boris Johnson have damaged the Bank of England's capacity to implement a firm monetary policy. Lower Average Hourly Earnings do not provide solace to a growing labor force and, consequently, to the BOE, since families are experiencing extreme heat. Due to limits on business investment, the BOE's aggressive interest rate increases might have a negative impact on employment growth.

Meanwhile, the bulls of shared currencies have disregarded the weak Retail Sales report. The economic statistics came in at -3.7%, which was worse than the predicted -1.7% and the previous report of 0.4%. In times of skyrocketing price pressures, Retail Sales data should have shown an increase; nevertheless, a decline in the same suggests that overall demand is exceedingly low.