The pound euro (GBP/EUR) exchange rate is falling on Tuesday.
The pound is falling as the mood sours and investors weigh Middle East developments and their impact on the UK economy.
UK services activity weakened sharply, with the PMI falling to 50.5, its lowest in 11 months, while input costs surged at the fastest pace since 2021, highlighting rising inflation risks. The composite PMI also edged closer to contraction.
In the eurozone, services growth slowed to a 10-month low, with demand deteriorating and confidence weakening. Rising cost pressures across both regions point to a growing stagflationary backdrop driven by higher energy prices.