Sterling Hits 16-Month High Against Euro on Debt Risks
Sterling reaches a 16-month high against the euro as markets price a 90% chance of a 25-basis-point BOE rate hike in November.
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what happened
Sterling climbed to a 16-month high against the euro, extending its recent advance, Dow Jones Newswires reports. The euro is under pressure from concerns over French debt, while the pound is supported by expectations of tighter Bank of England policy.
LSEG data show markets assigning a 90% probability to a 25-basis-point BOE rate increase in November. Enrique Diaz-Alvarez of Ebury said in a note that any hike would probably be a one-off insurance measure rather than the start of a sustained tightening cycle.
The U.K. budget due on October 28 remains a “critical risk” for sterling and U.K. government bonds, he said, as bond investors renew their focus on fiscal sustainability. The euro fell to 0.8443 pounds, its lowest level since June 2025.
why it matters
The move reflects simultaneous pressure on the euro from French debt concerns and support for sterling from rate expectations. The U.K. budget is the next key event for the currency and government bonds.
instruments
sources
- Sterling Jumps Vs Euro on French Debt Concerns, BOE Rate Rise Bets — Market Talk — Dow Jones Newswires, 12 October 2026 at 11:32 UTC
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