gbp-and-eur-coins

The pound euro (GBP/EUR) exchange rate is falling after steep losses last week to a 6-week low.

The pound fell sharply last week despite the BoE holding rates at 4%, as markets focused on the UK’s deteriorating fiscal outlook. Surging borrowing has deepened Chancellor Rachel Reeves’ budget challenge ahead of November, raising fears of tax hikes and slower growth.

UK GDP stagnated in July. PMI data is due tomorrow. BoE Governor Andrew Bailey speaks today, though fiscal concerns limit the upside for sterling.

Meanwhile, the euro strengthened ahead of ECB commentary and consumer confidence, with policymakers signaling no urgency for further rate cuts.