Nomura Research maintains a long EUR/GBP position targeting a move towards 0.8950 by end of April.

"From a cyclical, interest rate perspective there appears to be limited prospects for the BoE to match market pricing for hikes in the months ahead. Indeed, Governor Bailey, in a Reuters interview on 1 April, suggested that markets were “getting ahead of themselves” in terms of pricing tightening, and that the MPC would “focus on jobs, growth” at coming meetings, as well as inflation. He mentioned that firms he speaks to feel a “real lack of pricing power”. As the most likely swing voter between the hawks and doves, these comments suggest a high bar for him to flip to deliver hikes," Nomura notes.

"The ECB, meanwhile, appears to have a little more potential to match expectations with several hawkish comments suggesting that the April meeting is live. While we still think a hike is unlikely, a hawkish tone is likely to persist while inflation risks remain elevated," Nomura adds.