The pound euro (GBP/EUR) exchange rate is falling below €1.1450.
The pound fell sharply after weak UK labour market data fueled expectations of further BoE rate cuts.
Unemployment rose to 5.2%, the highest since the pandemic, while private sector wage growth slowed to 3.4%, its lowest in over five years. Payroll numbers also declined, signalling cooling labour market pressures. Markets now fully price in two rate cuts this year, with CPI data due tomorrow.
The euro gained against sterling despite mixed German sentiment data. The ZEW economic sentiment unexpectedly fell, but the current situation improved. These conditions point to a fragile economic recovery.