- Pound (GBP) rises after yesterday’s losses
- UK small & medium-sized firms consider cutting staff
- Euro (EUR) is falling but rises against the USD
- German GFK consumer confidence unexpectedly falls to -20.3
The Pound-Euro (GBP/EUR) exchange rate rose on Thursday, recovering yesterday’s losses. The pair fell 0.0.9% in the previous session, settling on Wednesday at €1.1717. It traded between €1.1710 and €1.1750. At 21:30, GBP/EUR trades +0.13% at €1.1732
The pound rose on Thursday as the market mood remained buoyant on signs that the Iran-Israel ceasefire was holding up.
This upbeat mood overshadowed mounting evidence that the UK labour market is showing signs of slowing. According to the British Chamber of Commerce, around one-third of small and medium-sized UK employers have made staff redundant or are considering cutting jobs as a direct result of the increased tax burden on social security bills and the higher minimum wage.
The B CC noted that 13% of its member firms had cut jobs and 19% were actively considering cuts as a result of April’s tax hike on National Insurance contributions.
The data comes after Bank of England policymaker David Ramsden warned that signs were clearly slowing the UK labour market, which he saw as a reason to cut rates more aggressively.
Meanwhile, data yesterday showed that wage growth slowed to below inflation at 3% and job vacancies also dropped.
The EUR fell against the pound but surged to its highest level since 2021 against the US dollar.
German consumer morale unexpectedly fell. The GFK German consumer confidence index dropped to -20.3 from -20.0 as the mood soured slightly, and precautionary savings increased. The savings indicator rose to 13.9, the highest level since April 2024. This data indicated that consumers lacked confidence in making big purchases.
Separately, EU leaders met today amid soaring defense budgets and as they mull their response to President Trump’s trade tariffs. The EU needs to reach an agreement with Trump by July 9 when tariffs on nearly all the blocs exports rise to 50%
