Pound euro exchange rate: GBP stabilises as UK economic growth rebound in Q2 | City & Business | Finance
The pound is currently holding steady against the euro this morning as market digest the UK’s latest growth figures.
According to data published by the Office for National Statistics (ONS), the UK economy expanded 0.4 per cent in the second quarter, up from just 0.2 per cent at the start of the year.
This was in line with market expectations as UK economic activity picked back up following the disruption caused by the adverse weather at the start of the year.
The ONS reported that the warm weather and World Cup hype helped to drive economic growth between April and June as it prompted consumers to spend more.
However, putting a slight dampener on the results and limiting gains in the pound was an accompanying warning from the ONS suggesting that “the underlying trend in real GDP is one of slowing growth”.
Meanwhile, the euro is facing pressure this morning on concerns that the Eurozone may be overexposed to some of the financial problems in Turkey.
A report in the Financial Times suggests that the Eurozone’s chief financial watchdog has raised concerns about the exposure of a number of the bloc’s largest lenders to Turkey amid a dramatic downturn in the Turkish Lira.
The Lira fell 5 per cent to a new all-time low against the US dollar on Friday morning, accentuating these fears and unsettling the euro.
Looking ahead to next week’s session, movement in the pound euro exchange rate is likely to be dominated by the UK’s latest inflation and wage growth figures.
Should either piece of data disappoint it is likely that the pound could tumble as it raises further questions over whether the Bank of England’s recent rate hike was to create a buffer for the bank against a chaotic Brexit rather than due to the UK’s economic performance.
Meanwhile, in terms of the euro the focus is likely to be on the Eurozone’s latest GDP estimate, with euro exchange rates likely to be put on the defensive in the first half of the week if growth in the bloc is confirmed to have slowed in the second quarter.