The pound has hit a two year high against the euro since Brexit after the European Central Bank slashed interest rates for the fourth time this year, over fears the economy will weaken.
Sterling gained 0.13% against the euro to €1.215, hitting its highest level since the Brexit referendum in 2016. The single currency ended the day at €1.211 against the pound, up by 0.3%.
The Times reports that the euro declined by 0.18% to $1.04 against the dollar.
The ECB’s governing council said the decision had been based on new forecasts showing average consumer price inflation would fall to 1.9% cent in 2026, below the eurozone’s 2% target.
Christine Lagarde, president of the ECB said on inflation outlook that "This is not yet victory, this is not yet mission accomplished."
She said the expected decline in price pressures “led us to acknowledge that inflation really was on track to breach our 2% target in the medium term.
"That gave us the level of confidence to decide on a cut, and the appropriate cut, which in our view was 25 basis points.”
FTSE 100
The UK's flagship share index, the FTSE 100, was up 20 points at 8,328 shortly after opening this morning.
Brent crude oil futures were up 0.15%, trading at $73.45 a barrel.
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