- Pound (GBP) falls for a second day
- Grocery inflation remains sticky at 4.7%
- Euro (EUR) is rising as German exports beat forecasts
- Trade to European countries rose, but to the US and China fell
The Pound-Euro (GBP/EUR) exchange rate is falling for a second straight day. The pair fell -0.3% in the previous session, settling on Monday at €1.1447. It traded between €1.1419 and €1.1468. At 15:00 UTC, GBP/EUR trades -0.06% at €1.1442.
The pound is edging lower for a second day, and the post-Budget relief rally runs out of steam. The Chancellor’s budget wasn’t as bad as feared in the eyes of the markets.
Still, losses are limited after data showed that UK grocery inflation held steady at 4.7% in the four weeks to November 30, keeping pressure on households as they face higher bills heading towards the Christmas holiday.
The Bank of England keeps a close eye on food prices as it considers they play a key role in shaping the public’s overall inflation expectations. UK inflation eased to 3.6% year on year in October.
Meanwhile, the same report from Worldpanel showed that UK grocery sales were over the same four weeks. Rose by 3.4% indicating their volumes were down after inflation is taken into account.
Delving deeper into the data industry, Tesco, an industry leader, saw its sales rise 4.7% over the 12 weeks to November, taking its market share to 28.3%.
A separate survey showed that British consumers kept a tight rein on overall spending in November, as a sign of caution ahead of the Chancellor’s late-November budget.
The euro is pushing higher amid a relatively quiet day in the market. Data showed that German exports unexpectedly rose in October, driven by trade within the European Union, while shipments to the US and China fell sharply.
Exports were up 0.1% month on month, defying expectations of a 0.2% decline. Exports to EU countries rose by 2.7% on the month, whilst exports of goods to countries outside the EU declined by 3.3%.
The decline in exports to the US comes due to Washington’s tariffs on European imports; meanwhile, exports to China decreased by 5.8% and imports fell by 5.2% on the month.
