The British pound has actually performed quite well given the heavy sell-off in European equities on Thursday. Economists at ING expect the EURGBP pair to return to the 0.8280/8300 area.

Sterling holding its own

“UK equities are heavily exposed to the Oil and Gas sector, which understandably has come under a lot of pressure given links to Russia.”

“The surge in European gas prices probably means that UK CPI peaks closer to 8% than 7% and will stay higher for longer. That should keep the BoE wary and should market conditions calm – and the focus return to macro-tightening – EUR/GBP should be able to return to the 0.8280/8300 area.”