EUR/GBP does not have huge downside room, but a rebound to 0.88 will likely be very gradual – ING

Economists at ING analyze EUR/GBP outlook.

No pushback against aggressive expectations

The Sonia curve is pricing in a 6.15-6.20% peak rate as of this morning around the turn of the year, and keeping the option of a 50 bps hike in August very much on the table (44 bps priced in). 

Data may argue against such aggressive action down the road, but the majority of Bank of England officials look unlikely to vehemently push back against tightening expectations for now. 

EUR/GBP does not have huge downside room, but a rebound to 0.88 will likely be very gradual.