ING says markets are attaching a risk premium to EUR/GBP pair

ING says markets are attaching a risk premium to EUR/GBP pair

Source: EODHD - https://www.investing.com/news/forex-news/ing-says-markets-are-attaching-a-risk-premium-to-eurgbp-pair-93CH-4145248
Published: Jul 22, 2025 5:28 AM

Investing.com - The United Kingdom reported higher-than-expected government borrowing of £20.7 billion for June, surpassing forecasts from the UK fiscal watchdog, according to analysis released Tuesday by ING. The Dutch financial services firm noted that while the borrowing news had no immediate significant impact on the pound, it likely increases the probability of tax increases in autumn 2024, potentially limiting upside for the British currency. ING estimates that markets are currently attaching a risk premium to the EUR/GBP pair, calculating an approximate 0.8% overvaluation that approaches the upper bound of what would signal stretched misvaluation. This premium partly stems from the eu...

Market context: This update is relevant to EUR traders, with EURGBP as the primary instrument to monitor for follow-through, trend continuation, or headline volatility.