With one-week deposit rates at 4.75% and the highest in the G10 space, sterling may be deriving some inflows as the market makes up its mind about the speed and magnitude of Trump's policy agenda.

Huw Pill cites the ongoing focus on service inflation

“Additionally, the Bank of England (BoE) rate profile continues to get traded closer to the Fed than the ECB and suggests sterling should outperform against the euro. We have a year-end EUR/GBP at 0.83 – not too far from current levels.”

“However, the risk to that forecast probably lies more to 0.82 than 0.84 since the UK is less exposed on the trade side and the BoE has yet to abandon its concern over late-cycle inflation. The BoE's Chief Economist, Huw Pill, was the latest MPC member yesterday to cite the ongoing focus on service inflation.”