- Pound (GBP) is rising after recent losses
- Retailers are cautious regarding the outlook for this year
- Euro (EUR) is falling after mixed data
- Unemployment falls, but investor sentiment weakens
The Pound-Euro (GBP/EUR) exchange rate is rising after yesterday’s losses. The pair fell -0.20% in the previous session, settling on Wednesday at €1.1528. It traded between €1.1521 and €1.1557. At 17:30 UTC on Thursday, GBP/EUR trades 0.06% lower at €1.1533.
The pound is rising against the euro but falling against the US dollar after data showed Britons’ spending patterns over the festive period.
The data showed that Britain’s prioritised spending on festive food but were more cautious about spending on clothes and gifts across Christmas, according to updates from Tesco, Marks and Spencer, and Primark.
December’s food sales were solid, which offered some relief for major retailers, but lingering consumer caution and stubborn inflation create a more uncertain outlook for 2026.
These figures come after recent data and surveys have shown UK consumer confidence remains fragile as unemployment ticks higher. Official data last month revealed that the UK’s unemployment rate rose to its highest level since early 2021.
The euro is under pressure, falling against the pound and the US dollar after mixed eurozone data, and as investors monitor the US interest in acquiring Greenland.
In the eurozone, the unemployment rate fell slightly in November to 6.3%, down from 6.4% in the previous month.
Separately, eurozone sentiment data show that consumer sentiment was subdued across the eurozone at the end of last month. Despite the broadly stable unemployment rate, consumer and business sentiment were weaker.
Economic sentiment index in December slipped to 96.7, missing the consensus of 97 and down from 97.1.
Consumer confidence improved modestly but remained depressed by historic standards at -13.1, up from -14.6. Weak consumer confidence remains a barrier to higher household spending.
Looking ahead eurozone retail sales figures are to be released tomorrow. Retail sales are expected to rise 0.1% month-on-month.