GBP/EUR Exchange Rate Steady, UK Consumer Confidence Held Back by Brexit Uncertainty
The Pound Euro exchange rate held steady today, with the pairing currently trading around €1.172.
Sterling failed to gain after November’s UK GfK consumer confidence figure flatlined at its lowest level in six years.
The report shows that consumers had remained cautious this month due to uncertainty around Brexit and the 12th December general election.
Joe Staton, Client Strategy Director at GfK, said:
‘The General Election is potentially an opportunity to move us out of the doldrums, but for this to happen there must be a clear result. A hung parliament could be very damaging for consumer confidence and would surely deepen the obvious malaise that we see month after month.’
The GBP/EUR has remained relatively unmoved against the euro today, with yesterday’s major YouGov MRP poll steadying British markets after it suggested a majority win for Prime Minister Boris Johnson in next month’s election.
With just two weeks to go until the election, however, some investors are remaining cautious as Britain’s political developments are expected to intensify.
EUR/GBP Exchange Rate Steady despite Rising Eurozone Inflation in November
The euro failed to gain on the pound despite today’s release of the Eurozone’s year-on-year flash core inflation figure for November, which beat forecasts and rose to 1.3%.
However, due to the bloc’s weak underlying economic developments, this failed to provide uplift for the single currency.
Bert Colijn, the Senior Eurozone Economist at ING, commented:
‘The question is whether this is the start of a more sustained increase.’
‘[However,] as businesses continue to lack confidence to push higher input costs onto the consumer, it is unlikely that this will lead to materially higher core inflation in the months ahead.’
Today also saw the Eurozone’s powerhouse economy, Germany, also struggle after German retail sales fell sharply to 1.9% in October.
GBP/EUR Outlook: Could Election Jitters Weaken the Pound?
The GBP/EUR exchange rate will likely remain subdued into next week, with election jitters over the possibility of a hung parliament continue to hold back Sterling.