The pound-euro (GBP/EUR) exchange rate is falling towards €1.1350 after gains last week.
The pound is drifting lower as markets focus on the UK budget on November 26. Chancellor Rachel Reeves faces higher-than-expected public borrowing, with £116.8 bn recorded so far this fiscal year, forcing fiscal tightening.
Tax hikes are expected to cover a £20–30 bn shortfall, which could slow growth and prompt faster BoE rate cuts.
The euro is rising, but gains could be limited after weaker-than-expected German business sentiment.
The German Ifo sentiment index fell to 88.1 in November, reflecting stagnant private-sector growth and depressed hopes surrounding an economic recovery.