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Pound at 5-week high versus struggling euro after ECB


© Reuters. FILE PHOTO: A British Pound Sterling note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration

LONDON (Reuters) -The British pound rose against the euro on Thursday as the single currency weakened after the European Central Bank maintained its plans to slowly rein in stimulus measures.

Against the euro, sterling gained 0.6% to its highest level since March 7 at 82.58 pence.

The euro fell across the board, as comments from ECB chief Christine Lagarde were taken as a sign that the central bank was in no rush to raise interest rates even though it stuck to plans to end its stimulus plans by the third quarter.

Meanwhile, financial markets are all but certain the Bank of England will raise rates for a fourth consecutive meeting on May 5, before taking them to 2%-2.25% by the end of 2022, as inflation continues its sharp rise.

Data released on Wednesday showed British consumer price inflation jumping in March to 7%, its highest level in three decades and more than expected by most economists in a Reuters poll.

Analysts are less sure that the BoE will hike rates as aggressively as money markets are pricing in and with British markets closed on Friday and Monday, domestic focus is on a speech from BoE governor Andrew Bailey on Thursday next week.

“As things stand, odds are he will not reinforce rate expectations and the GBP remains at risk of falling back under 1.30,” Scotiabank analysts said in a note.

The pound fell 0.5% against a strengthening U.S. dollar to $1.3045 after earlier hitting its highest level since April 5.

Pound at 5-week high versus struggling euro after ECB

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