The pound euro (GBP/EUR) exchange rate is rising, adding to last week’s gains.
The euro is under pressure after French Prime Minister Sebastien Lecornu resigned just 27 days into office, adding to France’s political crisis.
A new election is looming, but it may not resolve the crisis, as the fragmented parliament struggles to pass a contentious budget that aims to cut spending and reduce the deficit. French bond yields rose, and the CAC 40 dropped 2%, led by banking losses.
The pound is rising, but gains could be limited, given concerns over the fiscal outlook.
Attention turns to Bank of England Governor Andrew Bailey’s speech amid moderating growth in the services sector.