It was a hectic day in the world of economic data yesterday, with inflation and Gross Domestic Product (GDP) for European countries.
We can compliment our continental cousins on not just beating inflation (with core inflation falling again, to 2.7%) but also escaping recession at last. No more schadenfreude at the sight of Germany’s troubles, as Europe’s biggest economy grew, like France’s, by 0.2% in the first quarter of 2024.
Italian inflation is down to 0.9%, French to 2.2% and Spain’s to 3.3%.
Why would all that lead to the pound climbing once again against the euro? Probably because with inflation down and GDP weak but rising, the door is clearly open for the European Central Bank to cut interest rates.
However, for today it is all about US interest rates, with the US Federal Reserve making its decision at 7pm (UK time) tonight.
So, plenty happening, and in the meantime sterling continues to butt its head up against the stickiest of resistance levels against the euro.
Currently you can get as many euros to the pound as almost any time since the summer of 2022, but will that last long with the eurozone bouncing back?
To fix that rate for the year or two ahead, call your account manager on 020 7898 0541.
