The pound rises against the euro to its highest levels since March 2022

The price of the British pound rose to its highest levels in more than two and a half years, while British government bonds fell.
This came against the backdrop of markets expecting the Bank of England to reduce interest rates at a slower pace than the European Central Bank.
Bloomberg News Agency reported that on Tuesday, it rose by 0.3% to 0.8249 pounds per euro, which is its highest level since March 2022.
At the same time, the yield on British 10-year Treasury bonds rose by 6 basis points to 4.33%, its highest level since last November 28.

Be careful about interest cuts

Financial market traders expect the Bank of England to maintain key interest rates during its last meeting of the current year, scheduled for next week.
While he continues to be cautious about cutting rates, as the growth of the British economy remains strong.
While the inflation rate is still rising in some sectors.

European interest rate cut

On the other hand, the markets expect the European interest rate to be cut by a quarter of a percentage point during the European Central Bank’s Board of Governors meeting next Thursday.
This aims to support the faltering economy in the single European currency area.
Brad Bechtel, head of the exchange markets sector at Jefferies Consulting, says that the price of the pound sterling reaching the level of 0.8200 pounds per euro seems imminent.
He added: It has become very clear that the Bank of England will continue to lag behind the European Central Bank in cutting interest rates, both in terms of the size and pace of the cut.

Growth of the global economy

Morgan Stanley expects the global economy to grow by 3% in 2025 and 2.9% in 2026.
This is despite his warning that there are several challenges that may hinder the growth of some major regions, according to what was published by the “Fiber to Fashion” platform.
The bank said progress looked set to slow and vary with Europe likely to grow by around 1% but global trade disruptions could be a drag.
This is as uncertainty increases and tariff and immigration policies in the United States begin to slow economic activity, as well as inflation continuing to return to normal globally.