EUR/GBP flat lines above 0.8600 as ECB and BoE keep interest rates unchanged

The EUR/GBP cross is steady around 0.8625 in the early European session after the ECB and the BoE both held interest rates but signalled they could tighten further if energy-driven inflation from the Middle East conflict intensifies. The ECB kept its deposit facility rate at 2% and said upside risks to inflation and downside risks to growth have increased; Lagarde noted a data-dependent, meeting-by-meeting approach. The BoE held rates at 3.75% with Governor Bailey warning that severe price pressures from the conflict could require “forceful tightening.” The central-bank caution has kept EUR/GBP range-bound as markets weigh hawkish rhetoric against current policy inaction.