The pound euro (GBP/EUR) exchange rate is rising modestly on Tuesday.
The pound is edging higher despite signs of a weakening UK labour market, with vacancies falling to a near five-year low and unemployment declining due to rising economic inactivity rather than stronger hiring.
PAYE payrolls continue to drop, pointing to softer employment conditions. Wage growth remains subdued at around 3.3%, but rising inflation could squeeze real incomes and growth. Meanwhile, the euro is under pressure after weak German sentiment data. ZEW economic sentiment dropped to -17.2, a level last seen in 2022, owing to the energy shock.