The pound euro (GBP/EUR) exchange rate is falling further on Tuesday.
The pound is weakening as investors assess UK political developments and the Bank of England’s policy outlook.
Gilt yields eased from yesterday’s highs as Prime Minister Keir Starmer sought to steady his leadership after pressure yesterday to resign.
Sterling is also weighed down by expectations of a potential BoE rate cut as early as March following last week’s dovish signals.
The euro edged higher, supported by improving investor sentiment and comments from ECB President Christine Lagarde, who said inflation should stabilise near the 2% target after cooling to 1.7% in January.