Pound Euro (GBP/EUR) Exchange Rate Dips as Inflation Continues to Hurt UK Outlook
The Pound Euro (GBP/EUR) exchange rate is falling today amid fears over the UK’s long-term economic outlook. The Pound (GBP) is struggling as confidence across the UK’s private sectors fell sharply today. The Euro (EUR) is also falling against many of its rivals today as the Ukraine-Russia conflict continues to weigh on the currency, as well wider trends in global risk appetite.
At time of writing the GBP/EUR exchange rate is at around 1.1859, which is down roughly -0.3% from this morning’s opening figures.
Pound (GBP) Slips as Johnson Faces Fresh Calls to Resign
The Pound (GBP) is sliding against many of its rivals today. Soaring inflation and the UK’s cost-of-living crisis are continuing to impact Sterling.
Following poor retail sales and consumer confidence figures last week, GBP began today at 18-month lows against the US Dollar (USD). Sterling’s woes continued today, as figures indicated that confidence in the UK’s manufacturing sector fell at its fastest rate since April 2020.
A cautious tone from the Bank of England (BoE) is also likely causing headwinds for the Pound today. Speaking on Friday, Governor Andrew Bailey stated that the central bank was walking a ‘very tight line’ over curbing inflation versus potentially pushing the UK into a recession.
GBP may see additional headwinds from the political sphere today as PM Boris Johnson comes under renewed pressure. Multiple senior Conservative MPs have called for Johnson to resign after MPs of all parties agreed to an investigation into whether he deliberately misled parliament.
Euro (EUR) Stumbles Despite Victory for Macron
The Euro (EUR) is losing ground against its competitors today despite the re-election of French President Emmanuel Macron. Wider fears over the impact of further lockdowns in China are likely weighing on EUR today. Additionally, a cut to German growth forecasts may be pushing the single currency lower.
Reports today indicating that Germany, the bloc’s largest member, is set to cut its growth forecasts could be contributing to the Euro’s poor performance today. Speaking to Reuters, a government source stated that the war in Ukraine will prompt a revision down from 3.6% to 2.2% growth in 2022.
Major losses for EUR in the short-term could be limited by a rise to German business morale, however. Firms reported that they were less pessimistic about their outlook. Analysts highlighted the resilience of the German despite the Ukraine-Russia conflict.