Homepage » News » EUR/GBP » Euro Pound (EUR/GBP) Exchange Rate Rises as UK Growth Figures Fall

Euro Pound (EUR/GBP) Exchange Rate Rises as UK Growth Figures Fall

Pound Euro exchange rate forecast

EUR/GBP Exchange Rate Edges Higher as Brexit Uncertainty Holds Back UK Growth

The Euro Pound (EUR/GBP) exchange rate edged higher today and is currently trading around €0.8921 on the interbank market.

The Pound (GBP) fell against the Euro (EUR) following the publication of the UK GDP figures for April, which fell four times worse-than-expected to -0.4%.

Garry Young, an Economist at NIESR, said:

‘Brexit-related uncertainty at home and trade tensions abroad (are) dragging on investment spending and economic growth.’

Today also saw the printing of the UK manufacturing production figures for April, which fell below the forecast 1.3% increase to a disappointing -0.8%.

UK industrial production figures also eased, leaving many Sterling traders feeling jittery about the state of the economy – with industrial figures showing the worst output since 2002.

Yael Selfin, a Chief Economist at KPMG UK, commented:

‘The hangover that’s followed the UK’s original exit date is proving stronger than anticipated. Today’s figures signal the UK economy is likely to experience more subdued growth for the rest of the year, marred by Brexit uncertainty.’

The Euro, meanwhile, rose following the better-than-expected Italian industrial output figures, which came in at -0.7%, despite the -0.9% forecast.

EUR/GBP Exchange Rate Climbs Higher as French and German Markets are Close for Whit Monday

EUR continued to gain on Sterling today despite French and German markets being closed for Whit Monday, a bank holiday.

Meanwhile, Italy is remaining in focus for many single currency traders as Rome’s debt is increasingly exacerbating tensions with the European Commission, which may once again have to consider disciplinary actions.

Euro investors, however, are remaining cautious over fears that the US-China trade war could spill over, potentially weakening the Eurozone’s economy.

The French Finance and Economist Minister Bruno Le Maire remained downbeat, saying:

‘We do not have the growth figures we should have because of the trade tensions between the US and China. I want to be very clear, a trade war would mean an economic crisis all over the world, and especially in Europe.’

EUR/GBP Forecast: Sterling Could Rise on a Brexit Breakthrough

Sterling investors will be looking ahead to tomorrow’s printing of the UK ILO unemployment rate figures for April, which are expected to rise.

These will be followed by the UK average earnings excluding bonus figures for April, which are forecast to hold at 3.3%.

Euro traders, meanwhile, will be focusing on global political developments tomorrow, with few economic releases of note.

Any signs of tensions increasing between the two superpowers – US and China – could leave single currency traders jittery, and potentially weakening the EUR/GBP exchange rate.

The Euro Pound exchange rate will remain sensitive to Brexit developments, however, and with any signs of a breakthrough this week could see Sterling rise as the deadlock is challenged.