The pound euro (GBP/EUR) exchange rate is falling, after modest gains last week.
The pound is falling despite data confirming Q1 growth of 0.7% QoQ, the strongest growth since Q1 2024. However, the economy is not expected to maintain this level of expansion, with the BoE forecasting 0.25% growth in Q2.
Separately, UK business confidence levels rose to the highest level since 2015, and UK lenders approved more mortgages in May.
The EUR is rising despite German inflation and retail sales coming in weaker than expected.
German inflation unexpectedly dipped to 2% YoY from 2.1%. Economists had expected a raise to 2.2%.
Retail sales dropped -1.6% MoM defying expectations of a rise to 0.5%.