EUR/GBP rises toward 0.8800 following UK CPI, Germany’s IFO Survey data awaited

EUR/GBP recovers its recent losses from the previous session, trading around 0.8780 during the European hours on Wednesday. The currency cross gains ground as the Pound Sterling (GBP) declines following the release of weaker Consumer Price Index (CPI) data from the United Kingdom (UK) for November.

The UK headline CPI rose 3.2% year-over-year (YoY) in November, above the Bank of England’s (BoE) 2% inflation target. Markets predicted a 3.5% growth in the reported period against the rise of 3.6% in October. Meanwhile, the monthly UK CPI arrived at -0.2% in November, versus a rise of 0.4% reported in October.

The UK core CPI (excluding volatile food and energy items) rose 3.2% year-over-year (YoY) in the same period, compared to October’s 3.4% print and came in softer than the forecast of 3.4%. The annual Retail Price Index came in at 3.8% in November, against the expected and previous reading of 4.3%.

Weaker data reinforced the dovish expectations that the Bank of England (BoE) will cut interest rates by 25 basis points to 3.75%, the lowest since 2022, as rising unemployment and economic stagnation ease inflation pressures.

Traders will likely watch Germany’s IFO Business Survey, followed by Eurozone core HICP data later in the day. The Euro (EUR) gains ground as investors scale back European Central Bank (ECB) easing expectations after officials signaled further cuts may not be needed in 2026.