Sterling, Euro Could Rise Only Briefly if BOE, ECB Lift Rates Aggressively -- Market Talk

Dow Jones03-25 21:10

1310 GMT - Sterling and the euro might struggle to sustain any gains if the Bank of England and European Central Bank raise interest rates more aggressively than markets expect, MUFG Bank's Lee Hardman says in a note. While faster rate rises could offer some near-term support for sterling and the euro, those gains would "ultimately prove short-lived if tighter monetary policy alongside higher energy prices trigger a deeper economic slowdown/recession for European economies." The softer growth momentum indicated by Tuesday's U.K. and eurozone purchasing managers' surveys could dampen expectations for more aggressive rate rises. However, the BOE and ECB are still likely to raise rates if the inflation shock proves more prolonged, he says. (renae.dyer@wsj.com)

 

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March 25, 2026 09:10 ET (13:10 GMT)

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