The pound-euro (GBP/EUR) exchange rate fell on Friday but rose over the week.
The pound fell after data showed the UK economy unexpectedly stalled in January, with GDP flat month-on-month and missing expectations for growth.
The figures suggest the economy was already losing momentum before the Iran conflict and the surge in energy prices, which could further weigh on activity. While weak growth would typically support Bank of England rate cuts, markets are now pricing in a strong chance of a rate hike by year-end due to rising inflation risks.
The euro edged higher but has fallen across the past two weeks as energy prices surge. Europe’s reliance on imported energy raises concerns over stagflation.
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