Inflation figures from the UK seem to be helping the British pound stay resilient against its rivals. Economists at ING expect the EUR/GBP pair to continue edging lower towards the 0.8270/80 region.

Another upside surprise for UK inflation

“UK December CPI has just come in at 4.8% YoY and core 4.2% YoY – both surprising on the upside. Combined with better November activity data and better jobs data, we favour a 25bp BoE hike on Feb 3rd.”

“An awful lot is priced for the BoE cycle – yet we think it is too early to 'fade' the GBP rally on a fully-priced BoE cycle – just in the same way it is too early to fade the dollar rally.

“For today, look out for testimony from BoE Governor Bailey on financial stability. Presumably, we should hear hawkish comments as to how the BoE will address inflation.”

“Expect EUR/GBP to continue working its way towards the 0.8270/80 area - despite intense speculation over PM Johnson's future.”