The pound euro (GBP/EUR) exchange rate is falling to 1.1500.
The pound is falling as the outlook deteriorates amid rising concerns about the impact of the Iran conflict on the UK economy.
The UK’s reliance on imported energy, high inflation, and fragile public finances keep the outlook vulnerable.
The euro is rising after German inflation data, which could show the first clear impact of rising energy prices. German inflation jumped to 2.8% Yo in March from 2% in February, while energy prices jumped 7.2%. The market is pricing in 3 rate hikes from the ECB this year.
Markets are increasingly focused on whether inflation in both the UK and the eurozone will remain elevated, reinforcing expectations that central banks may need to keep policy tighter for longer.
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