Pound sterling rallied against the euro in the wake of the Bank of England decision, but technicals could prove a headwind from here.
Pound sterling is under-pricing political uncertainty, say analysts, as Prime Minister Keir Starmer faces mounting pressure.
The British pound can extend its short-term rally in the next few days, but Bank of England and ECB communication will prove a challenge on Thursday.
Bank forecasts point to a gradual pound-to-euro decline, but outliers suggest a surprise could be coming.