- Pound (GBP) is rising, adding to last week’s gains
- REC warns demand for staff has dropped to historic lows
- Euro (EUR) is falling after sentiment drops to a 13-month low
- ECB rate decision is on Thursday
The Pound Euro (GBP/EUR) exchange rate is rising adding to gains last week. The pair rose 0.11% in the previous week, settling on Friday at €1.2054 and traded in a range between €1.2027 and €1.2096. At 12:00 UTC, GBP/EUR trades +0.25% at €1.2085.
The euro is falling after investor confidence deteriorated further in December. Eurozone Sentix investor confidence fell to -17.5 in December, marking the lowest reading since November 2023 and highlighting the pessimistic outlook for the region as the year comes to an end.
The Sentix investor confidence index fell from negative 12.8 in November. The current situation also declined
the survey suggests that a recession in the region is becoming an issue amid a weak economic outlook and as the political crisis in France drags on.
The data comes ahead of the ECB rate decision on Thursday. The central bank is expected to cut rates by 25 basis points, bringing them to 3%.
The pound was pushing higher against the euro on the US dollar at the start of the week. However, games could be limited given the weakness in the labour market just a month after the new government’s first budget.
The Recruitment and Employment Confederation and accountants KPMG said their joint index for demand for staff dropped to 43.9, marking the lowest reading since August 2020. This was down from October’s 46.1. The indexes only saw worse readings in the COVID-19 pandemic, the global financial crisis, and the immediate aftermath of the September 11 attacks on the US, highlighting the seriousness of the situation.
The latest development came after Finance Minister Rachel Reeves announced her budget on October 30. She unveiled an increase in employers’ National Insurance contributions and an increase to the minimum wage, which will increase the burden on firms and reduce their margins.