GBP/EUR: BOE’s Carney Slams Pound as German Industrial Output Rises

The British pound fell against the euro on Thursday after Bank of England Governor Mark Carney struck a particularly pessimistic tone in a speech in London, hinting UK interest rates might be headed lower. The fall in Sterling came as a huge relief rally took hold in global markets after the US and Iran stepped back from the brink of a new war in the Middle East.

GBP/EUR was lower by 74 pips (0.60%) to 1.1722 as of 1pm GMT, taking the currency pair back down to the lows reached on Monday this week.

The pound

The dovish remarks by the outgoing Bank of England governor were during a scheduled speech at an ‘inflation-targeting conference’ in London. Carney suggested policymakers on the central bank’s Monetary Policy Committee were considering cutting interest rates or increasing government bond purchases. The last time the bank took such action was directly after the 2016 EU referendum. Carney said, “As is entirely appropriate, there is a debate at the MPC over the relative merits of near-term stimulus to reinforce the expected recovery”.

The euro

The euro was higher against most major currencies on Thursday on signs of green shoots in Germany’s industrial sector. German industrial production for November exceeded expectations by expanding by 1.1% month-on-month. Economists have forecast a smaller rise of 0.7%. The positive data went a long way to offset the disappointing factory orders data released on Wednesday, which had weighed on the single currency. Traders have been watching economic activity in Germany’s export-orientated heavy goods industries for signs of a wider rebound across Europe.


European Union officials playing hardball on the upcoming second phase of Brexit, the negotiation of a trade deal is adding to the Sterling-weakness, notably against the euro. Whichever set of negotiators drive the tougher deal in any Free-Trade Agreement (FTA) should benefit that economy. European Commission President Ursula von der Leyen told an audience in London after visiting UK Prime Minister Boris Johnson that a partial trade deal was possible by the end of 2020. While some kind of a deal being achieved is a clear positive, a partial deal sounds like a far cry from the kind of comprehensive deal that would most benefit trade between the two economies. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.