- Pound (GBP) is falling after 4-days of gains
- Gorton & Denton by-election could have implications for PM Starmer
- Euro (EUR) is rising after recent declines
- ECB President Lagarde reiterates plans to stay until her term ends
The Pound-Euro (GBP/EUR) exchange rate is falling after four days of gains. The pair rose 0.19% in the previous session, settling on Wednesday at €1.1480. It traded between €1.1450 and €1.1486. At 12:30 UTC on Wednesday, GBP/EUR trades 0.13% lower at €1.1465.
The pound is under pressure as investors turn their attention to the Gorton and Denton by-election, which could have implications for Prime Minister Keir Starmer.
The election will give a valuable glimpse into how Labour is performing in an area that the party easily won around 20 months ago. A loss here for Labour could raise questions over Prime Minister Starmer’s leadership, just weeks after he survived an attempted coup.
The polls suggest that reform and the Green Party could be marginally ahead.
Separately, news that nearly 1 million Britons aged 16 to 24 were neither in employment nor in educational or training at the end of last year raises concerns over the health of the economy. This marks the second-highest level in more than a decade.
This week, Bank of England chief economist Huw Pill told the parliamentary committee that increases in the minimum wage and employer Social Security contributions have contributed to the difficulties young people face in the job market.
Meanwhile, the euro is modestly higher as investors digest ECB president Christine Lagarde’s latest speech.
Nagad repeated that her baseline expectation is that she will remain until the end of her term in October 2027.
Comments pushed back against reports that she could have been planning an early exit to give French President Emmanuel Macron a say in appointing his successor before an election next year.
Meanwhile, she also said that she expects inflation to reach the central bank’s 2% target in the medium term.
The central bank is not expected to move on rates this year.