The pound euro exchange rate (GBP/EUR) is falling sharply, extending losses from last week.
The pound is down sharply as political uncertainty weighs on sterling amid rising calls for Prime Minister Keir Starmer to resign following senior staff departures related to the appointment of Peter Mandelson as US ambassador. Political worries are pushing UK gilt yields higher.
UK GDP data later this week is likely to show stalled growth, which could drag on the pound.
Meanwhile, the euro is supported by improving investor sentiment, with the Sentix index rising to 4.2 in February, up from -1.8, marking its highest level since July 2025. The data points to an end to the downturn and to a tentative eurozone recovery.