The EUR/GBP cross extends its upside to near 0.8375 during the early European session on Friday. The Pound Sterling (GBP) remains under selling pressure amid concerns about the UK's fiscal outlook and the Bank of England's (BoE) ability to control inflation.

The significant depreciation of the GBP came after a rise in the yields of the UK benchmark 10-year treasury bonds to their highest level since 2008. The high costs of UK debt have raised significant concerns about the financial situation in the UK, resulting in a sharp decline in the British pound.

The sharp fall of the GBP followed a rise in yields of the UK benchmark 10-year treasury bonds to their highest level since 2008. The high costs of UK debt have prompted serious worries about the UK's financial condition, resulting in a sharp decline in the GBP. Bank of England Deputy Governor Sarah Breeden said on Thursday that recent evidence supported the case to cut interest rates gradually, although it was difficult to know how quickly.

On the Euro front, the Eurozone preliminary Harmonized Index of Consumer Prices (HICP) data for December will likely push the European Central Bank (ECB) to pursue its rate-cutting cycle more cautiously, supporting the shared currency. We project that the ECB will only cut rates once in the first half of this year, with additional cuts concentrated in the latter half of 2025," said Charlie Cornes, senior economist at the U.K.-based Centre for Economics and Business Research. 

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