The EUR/GBP collapses about 0.8470 while the sterling pound is strengthened after the BOE policy decision

• The EUR/GBP abruptly falls to about 0.8470 while the BOE maintains a gradual approach in the rate cuts cycle and elevates GDP growth projections for the year.
• The BOE reduces interest rates by 25 basic points to 4.25%, with a majority of 7-2.
• The EU plans to introduce countermeasures for a value of up to 95 billion euros on US imports.

The EUR/GBP pair slides to about 0.8470 during the early hours of North America on Thursday, since the sterling pound (GBP) attracts significant offers after the Bank of England (BOE) announces its monetary policy. The BOE reduced interest rates in 25 basic points (BPS) to 4.25%, as expected, and maintained its position of “gradual and cautious softening” of politics.

Market experts had anticipated a reduction of 25 BPS interest rates due to potential economic risks to tariffs announced by the president of the United States (USA), Donald Trump, at the beginning of April, the improvement of internal inflation and the decrease in energy costs.

Seven of the nine members of the Monetary Policy Committee (MPC) voted in favor of lowering interest rates, while two officials, Catherine Mann and Chief Economist Huw Pill, favored maintaining interest rates by 4.5%.

Meanwhile, the BOE has raised its projection of the Gross Domestic Product (GDP) for the current year to 1% from 0.75% projected at the February meeting. The governor of the BOE, Andrew Bailey, has expressed confidence that the disinflation trend is maintained and the Central Bank has predicted that the consumer price index (CPI) in one year will be 2.4%, below the 3% projection made in February.

Looking ahead, investors will focus on the commercial agreement between the US and the United Kingdom, which is expected to be announced by President Trump at 14:00 GMT. On Wednesday, Trump declared that he will announce a bilateral commercial agreement with a nation, which referred as a “country of high reputation” through a publication in Truth.Social. A New York Times report showed that the nation will be the United Kingdom.

In the Eurozone Region, the European Union Commission (EU) has revealed countermeasures for the Tariffs announced by the US Tariffs applied by President Trump, Reuters reported.