- Pound (GBP) is falling after gains yesterday
- UK unemployment remained at 4.7%, and payrolls fell
- Euro (EUR) rises after German ZEW economic sentiment improves
- Current expectations weakened in line with expectations
The Pound-Euro (GBP/EUR) exchange rate is falling, giving back yesterday’s gains. The pair gained 0.05% in the previous session, settling on Monday at €1.1563. It traded between €1.1545 and €1.1586. At 14:00 UTC, GBP/EUR trades -0.12% at €1.1553.
The pound is falling as markets digest the latest UK jobs data, and food inflation cooled for a second straight month.
Data from the Office for National Statistics shows that the UK unemployment rate remained unchanged at 4.7%, its highest level in four years, and the number of payrolled employees, as well as vacancies, continued falling.
The number of payrolled employees dropped by 142,000 between July 2024 and July 2025 and by a further 6000 between June and July this year. Meanwhile, the number of vacancies in the UK fell by 10,000 in the quarter to 728,000.
Despite this weakness, wage growth remains strong at 4.7% well above the 3% which is consistent with the Bank of England’s target inflation level. The data support the view that the BoE will keep interest rates unchanged at this week’s meeting.
The euro is gaining ground after Germany’s ZEW economic sentiment figures.
The data showed that investor confidence in Germany’s economic prospects unexpectedly brightened in September, lifting optimism that the eurozone’s largest economy is moving away from a prolonged downturn.
The German ZEW expectations index rose to 37.3, up from 34.7 in August, which was ahead of the decline to 25 that economists expected.
However, the measure of current conditions deteriorated as expected. An acknowledgment of the ongoing risks, including uncertainties surrounding US tariff policy and the upcoming autumn of reforms for Germany.
Delving deeper into the report, export-oriented industries saw a rise in expectations, particularly the automotive sector, as well as the chemical and pharmaceutical industries.
