The pound-euro (GBP/EUR) exchange rate is falling, dropping to €1.15, a level last seen in early August.
The pound is dropping amid rising concerns over the fiscal position of the UK, sending 30-year Gilt yields to the highest level since 1998.
This unease comes ahead of Chancellor Rachel Reeve’s highly anticipated Autumn Budget expected in early November.
The euro is rising against the GBP but falling against the USD as German, French and Dutch government bond yields surged amid worries of government spending.
Eurozone inflation rose to 2.1% YoY in August from 2%. The data support the view that the ECB will leave rates unchanged in next week’s meeting.