The pound euro (GBP/EUR) exchange rate is rising after small losses yesterday.
The pound is rising cautiously ahead of tomorrow’s Budget. The Labour Chancellor Rachel Reeves is expected to raise taxes, increase spending, and change the fiscal golden rules.
Higher tax is often deflationary, so it could help the BoE to cut rates further.
The euro is falling despite German consumer confidence improving by more than expected. GFK consumer morale rose to -18.3 from -21.
Eurozone GDP and German inflation data are due tomorrow. Weak growth and cool inflation could pave the way for more ECB rate cuts.
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