Sterling is trading on a slightly steadier footing as the UK government attempts to restore fiscal credibility. Still, economists at ING expect the EUR/GBP to reach the 0.90/91 region by end-2023.

Sterling may hold its gains through the first half of the year

“Sterling may hold its gains through the first half of the year as the Bank of England stays hawkish. But clearer signs of easing labour market and price pressures in the second half of 2023 will see conviction build of a forthcoming BoE easing cycle.”

“EUR/GBP may well be ending the year nearer 0.90/91.”