EUR/GBP Steadies Near 0.87 Ahead of Eurozone and UK PMI Data

EUR/GBP has consolidated around 0.87 after rallying above 0.8700 in mid-May on deepening UK political turmoil and leadership uncertainty around Prime Minister Starmer. Sterling initially strengthened as UK CPI printed hotter at 3.0% y/y, narrowing the policy gap with the ECB, before softer inflation and weak German industrial production (-0.7% MoM) added volatility. Banks including Rabobank continue to target 0.89 longer term amid sterling fragility, while Crédit Agricole now questions whether recent euro gains can be sustained ahead of flash PMI releases.