- Pound (GBP) falls as public sector net borrowing rises
- UK retail sales data tomorrow
- Euro (EUR) rises as French business confidence rises
- ECB Philip Lane to speak
The Pound Euro (GBP/EUR) exchange rate is rising for a second straight day. The pair fell -0.35% in the previous session, settling on Thursday at €1.1549 and trading in a range between €1.1533 – €1.1606. At 10:00 UTC, GBP/EUR trades -0.12% at €1.1535.
The pound is continuing to fall, extending losses from yesterday after the weaker-than-expected inflation data.
CPI cooled by the largest amount in two years bringing forward Bank of England rate cut bets for next year even after the BoE insisted that rates will need to stay high for longer to tame inflation.
Today saw the release of UK borrowing figures from the Office of National Statistics, showing that public sector net borrowing, excluding banks, came in at £14.3 billion. This was below November’s £15.2 billion but above forecasts of £13 billion. It also marked the fourth highest November borrowing since records began in the early 90s.
Meanwhile, for the eight months to November, public sector net borrowing was £116.4 billion, which is a £24.4 billion increase on the same period a year earlier and also marks the second highest amount on record for the financial year to November on record.
There is no more major UK data today. UK retail sales could move the dial tomorrow.
The euro is pushing higher, boosted by stronger-than-expected French business confidence. Business confidence in the eurozone’s second-largest economy ticked higher to 100, up from 99, and defied expectations of a fall to 98.
The data comes after German consumer confidence yesterday also came in better than expected, rising as inflation cools and as the income outlook brightens.
Attention now turns to ECB chief economist Philip Lane, who is due to speak. Any comments regarding the economy or future path for interest rates could influence the EUR.
