- Pound (GBP) is flat on Friday & across the week
- UK GDP rose 0.2% MoM in August
- Euro (EUR) in unchanged after German inflation data
- ECB is expected to cut rates next week
The Pound Euro (GBP/EUR) exchange rate is rising modestly after modest losses yesterday. The pair fell -0.02% in the previous session, settling on Thursday at €1.1945 and trading in a range between €1.1926 and €1.1969. At 21:00 UTC, GBP/EUR trades 0.02% at €1.1947. The pair is set to end the week unchanged after losses last week.
The pound is unchanged despite the UK economy returning to growth in August.
The latest data from the Office of National Statistics showed that the UK’s GDP rose 0.2% month over month after stagnating in June and July and after a recession at the end of last year. Broad-based growth in services, manufacturing, and construction helped the economy in August.
The data comes three weeks ahead of the newly elected Labour government budget, which will be unveiled on October 30th. However, the modest growth will be well received by the chancellor, as it gives a little more room to maneuver in a budget that the PM has already warned will be painful for some.
The chancellor is looking to plug a £22 billion hole in public finances with measures that some fear could further slow economic growth.
The euro is unchanged after German inflation cooled in September. German inflation, as measured by the consumer price index, eased to 1.7% annually, down from 2% in July, paving the way for the ECB to continue cutting interest rates.
The data comes after the minutes from the September ECB meeting showed that several policymakers were concerned over the outlook for growth in the region.
This, combined with eurozone inflation falling below the ECB’s target 2% level, means the central bank is expected to cut rates next week and could continue cutting rates in meetings throughout the rest of the year and into 2025.
