- Pound (GBP) is unchanged after a flat week last week
- PM Starmer denied knowledge of Mandelson’s vetting failure
- Euro (EUR) is unchanged but falling against the USD
- German producer prices jump by the most in 3-years
The Pound-Euro (GBP/EUR) exchange rate is unchanged on Monday after a flat week last week. The pair rose 0.03% in the previous week, settling on Friday at €1.1490. The pair traded between €1.1426 and €1.1517. At 15:30 UTC on Monday, GBP/EUR trades -0.01% at €1.1489.
The pound was unchanged against the euro on Monday but fell against the US dollar as markets continued to monitor developments in the Middle East and digest Prime Minister Keir Starmer’s speech before Parliament.
The embattled Prime Minister said Foreign Office officials had not informed him that they had granted security clearance to former US ambassador Peter Mandelson, against the vetting agency’s recommendations.
Separately, data on Monday showed that UK consumer confidence had fallen to its lowest level since mid‑2023 amid concerns about the impact of the conflict in the Middle East.
Inflation in the UK, already among the highest in the G7, looks set to rise further due to the energy shock, which is hurting confidence.
S&P Global’s consumer sentiment index for the UK fell to 42.3 from 44.1, marking a 33‑month low.
Separately, oil prices jumped 6% on Monday as the Strait of Hormuz remains closed and questions persist over whether peace talks will take place this week.
Looking ahead, attention will also turn to UK jobs data due tomorrow and UK inflation figures on Wednesday, which could provide more clues on how the UK economy is holding up.
The euro is weaker against the pound but also trading lower against the US dollar as energy prices rise once again.
Data from Germany, the Eurozone’s largest economy, showed that inflation at the factory‑gate level—as measured by producer prices—jumped 2.5% month‑on‑month in March, marking the largest monthly increase since August 2022. This came in well ahead of the 1.4% expected by economists and up from ‑0.5% in February.
Markets are now pricing in almost two rate hikes from the ECB this year.
Looking ahead, attention will be on Eurozone PMI data on Thursday, which will provide timely insight into the impact of rising energy prices and slowing growth on the economy.
