- Pound (GBP) is rising and is set to rise across the week
- CBI downwardly revised its GDP forecast to 1%
- Euro (EUR) is falling after the French government collapsed
- Eurozone Q3 GDP was 0.4% QoQ
The Pound Euro (GBP/EUR) exchange rate is rising after losses yesterday. The pair settled -0.26% in the previous session, settling on Wednesday at €1.2049 and trading in a range between €1.2044 and €1.2093. At 16:00 UTC, GBP/EUR trades +0.08% at €1.2079. The pair rose 0.17% across the week, adding to 0.17% gains last week.
The pound has managed to push higher across the week despite the Confederation of British Industry, a group of leading employers, cutting its estimate for economic growth in 2025. The group cited the measures in the new government’s budget as the reason for the gloomier forecast.
The CBI chief economist warned that measures in the budget would increase costs for businesses at a time when their profit margins are already under pressure.
The CBI Xbox growth next year in the UK to be 1%, down from a previously estimated 1.3%. This was in contrast to the OECD, which raised its forecast for Britain’s economic growth in 2025 from .2% to 1.7%.
Meanwhile, data from Read Recruitment showed fresh signs of trouble in the labour market, as job openings plunged compared to this time last year. Once again, the blame has been put squarely on the Labour government’s budget.
The euro was inching lower as the markets continued to digest the political developments in France this week, which saw French Prime Minister Michel Barnier’s government collapse After he pushed through a budget without a vote in parliament.
President Micron now has the job of finding a new Prime Minister in the coming days. Macron has accused the two groups of creating chaos.
Separately, eurozone GDP data showed that gross rose 0.4% quarter on quarter in Q3, up from 0.2% in the second quarter. However, given the recent weakness in PMI data, GDP figures could be considered out of date.