Pound on course to return to pre-Brexit levels after hitting two-and-a-half year high against the euro
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The pound has been tipped to return to levels last seen before the Brexit vote after reaching its strongest point against the euro for nearly three years. As sterling rose to €1.2157 against the single currency – its highest since March 2022 – a senior foreign exchange trader in the City said it could reach €1.30 next year.
The pound was last at those levels before Britain voted to leave the European Union in June 2016. The prediction came as the European Central Bank (ECB) looks set to cut interest rates in the eurozone to 3 per cent today in a bid to kick-start the moribund economy, which has been dragged down by crises in Germany and France.
And the Federal Reserve is also on course to cut rates in the US next week after official figures showed that inflation ticked up only marginally from 2.6 per cent in October – to 2.7 per cent in November. By contrast, the Bank of England is expected to leave interest rates in the UK unchanged at 4.75 per cent next week, to the disappointment of millions of borrowers.
Rally: Sterling has risen to €1.2157 against the single currency – its highest level since March 2022. Lower interest rates tend to weaken a currency, so the prospect of a rate cut in the eurozone – but not the UK – has pushed the euro down against the pound.
