Sterling Resilient on Carry Appeal as BoE Stays on Hold, ING Says

ING’s Chris Turner, citing UK economist James Smith, said July UK CPI had only a limited impact on EUR/GBP. Food inflation was benign, while the Bank of England’s core services measure saw only a modest uptick.

Against that backdrop, sterling’s carry appeal remains the key support while the BoE stays on hold, keeping the currency resilient.

The limited CPI reaction suggests EUR/GBP is being driven more by rate differentials and carry dynamics than by near-term inflation surprises.