The euro fell against the pound and the dollar yesterday following the European Central Bank’s latest interest rate decision. This morning it has recovered a little strength against the pound but remains pressured.
The ECB kept interest rates unchanged, at 0%, but suggested a rate hike of 25 basis points could be on the cards at its July meeting. If the bank does raise interest rates next month, it will be the first hike in over a decade.
ECB President Christine Lagarde also suggested that an even bigger hike, of 50 basis points, could be seen in September. When asked why the bank was not raising rates sooner and by more, Lagarde said “it is good practice to start with an incremental increase that is sizeable and not excessive”.
Lagarde is due to speak again this afternoon.
