Pound Sterling (GBP) has slumped by -0.7% against the Euro (GBP/EUR) today, something primarily caused by the afternoon’s report from the Economist Intelligence Unit (EIU).
2020 Set as the Date for Next UK Interest Rate, According to EIU
While last Thursday’s Bank of England (BoE) Interest Rate Decision resulted in a wave of dovishness and prompted some economists to put 2018 as the earliest that a UK interest rate hike could take place, the EIU has gone to another level and stated: ‘We now expect record-low interest rates to remain in place in the UK for at least the next four years’.
Pound Sterling (GBP) has recorded a loss of -0.8% against the Euro (GBP/EUR) this afternoon, with a potential cause being the wide-reaching decline of the world’s markets.
UK’s Trade Balance Figures may Cement or Worsen Current GBP Downtrend
With little in the way of other impactful data out tomorrow, it seems as though the hopes of a rising Pound Sterling (GBP) in the near-future may rest on the dubious release of the mixed-forecast UK Trade Balance stats for December.
The day’s UK data has proven a generally disappointing bag, as for every positive announcement, it seems there have been two negative ones. The Pound’s (GBP) slump of -0.4% against the Euro (GBP/EUR) this afternoon is indicative of as much.
Monthly Managers’ Survey shows Mixed Outlook on Future Movement for Scottish Economy
In this particular case, the less-than-inspiring news is the development that 50% of the managers surveyed by Bank of Scotland thought that economic growth in Scotland would slow in the coming 6 months.
The crux of the issue was thought to be the long-delayed wage increase that has ostensibly been a long time coming.
The Pound Sterling (GBP) has remained at a negative rate against the Euro (GBP/EUR) today, with the likely cause being the simple lack of economic publications, whether good or bad.
‘Late Winter’ Weakened Christmas Spending in UK, Figures Suggest
The closest thing the UK has had to good news today has been the announcement from Visa Europe that consumer spending in the UK was at its highest in 8 months last month; the assumption has been that due to January being a lot colder than December, sales of clothing picked up a month late.
The Pound Sterling to Euro (GBP/EUR) exchange rate has edged slightly lower this morning, although the Euro (EUR) isn’t in much higher demand than its UK counterpart. Both currencies have been softened by data shortages and clouds of negativity hanging above the UK and the Eurozone.
GBP/EUR Exchange Rate News: IFS Report Leaves Little Breathing Room for Chancellor Osborne
Pound Sterling (GBP) has flopped against most of its rivals today. Among its uninspiring movements have been losses of -0.3% against the Euro (GBP/EUR) and the New Zealand Dollar (GBP/NZD), -0.4% against the Czech Koruna (GBP/CZK) and -0.7% against the Russian Ruble (GBP/RUB).
With little in the way of impactful domestic data published recently, the Pound has instead been shifted by a pair of pessimistic short and long term forecasts for the UK economy.
In the former case, Prime Minister David Cameron has warned that if an ‘Out’ vote in the referendum takes place, France may cut ties with the UK on the immigration front, which could lead to the establishment of immigrant camps in Southern England.
Elsewhere, the Institute of Fiscal Studies (IFS) has estimated that for Chancellor George Osborne to keep the books balanced in the future, either further undesirable cuts or borrowing will have to be implemented in order to keep the UK economy afloat. The IFS’s estimation is that there is currently a 25% chance of further cuts or tax hikes in the 2019-20 period.
Euro (EUR) Makes Slight Uptrend Despite Disappointing Domestic Data
The Euro (EUR) has made small gains against most of its currency competitors so far today, with the rises of 0.3% against the Pound Sterling (EUR/GBP) and 0.7% against the South African Rand (EUR/ZAR) representing the general state of play.
The Euro’s gains today have largely gone against conventional movement, given that Spain’s December annual Industrial Production result has fallen from 4.3% to 3.7% and the overall Eurozone Sentix score of Investor Confidence has dropped from 9.6 to 6.
GBP/EUR Exchange Rate Forecast: ECB Speech due Shortly, UK Trade Balance Out Tomorrow
The next economic event to affect the pairing will come from the Eurozone, in the form of a speech by European Central Bank (ECB) official Stefan Walter.
Looking further ahead, tomorrow morning will see the announcement of the first true high-impact UK publication of the week, the trade balance results for December. Current forecasts are extremely mixed on the overall outcome in this area.
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2963 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7717 today.