- Pound (GBP) rose on Friday & across the week
- UK retail sales fall -0.1% MoM in November
- Euro (EUR) fell on Friday
- Eurozone consumer confidence dropped to -14.6
The Pound-Euro (GBP/EUR) exchange rate rose for a second straight day on Friday. The pair rose 0.2% in the previous session, settling on Thursday at €1.1416. It traded between €1.1378 and €1.1450. At 21:30 UTC on Friday, GBP/EUR settled 0.09% at €1.1426. The par trades +0.32% higher across the week.
The pound rose again on Friday, extending gains from Thursday when the Bank of England cut rates by 25 basis points but signalled caution over further moves. This slightly hawkish cut supported sterling for a second day, even as data painted a gloomy picture.
Data from the Confederation of British Industry suggests that British retailers reported a pre-Christmas sales slump and were more downbeat about the outlook for early 2026. The CBI gauge for expected sales for the month ahead deteriorated to -57 from -24, marking the weakest reading since March 2021, when the UK was in the midst of the COVID pandemic.
Meanwhile, official data published on Friday showed that retail sales fell 0.1% in November. This was the latest in a series of data pointing to a slowdown in the border economy ahead of Chancellor Rachel Reeves’ budget on November 26.
The euro fell on Friday after cooler-than-expected German wholesale inflation data. German wholesale inflation as measured by the producer price index fell by 2.3% year on year in November. This was a sharper decline than the 2.2% forecast by economists and was also down from 1.8% in October.
Digging deeper into the report, energy prices fell 9% year over year, a major contributor to the decline.
Meanwhile, other data on Friday showed that eurozone consumer confidence weakened in December. The flash consumer confidence indicator for the region slipped to -14.6, down from -14.2 in November, defying expectations of a rise to -14.
Consumer confidence fell to a three-month low and remains well below its long-term average.
The figures follow the ECB’s decision on Thursday to leave interest rates unchanged, and ECB president Christine Lagarde reiterated that rates are in a good place, with inflation hovering around the central bank’s 2% target.
