Pound Euro exchange rate: GBP holds up in Parliament
The pound euro exchange rate has been volatile as it begins to regain some of its losses (Image: Getty)
The pound euro exchange rate has remained volatile over the past day, as it begins to claw back some of its losses made over yesterday’s session when anxieties over Brexit took hold.
GBP was bolstered yesterday morning by a statement from the European Court of Justice Advocate General, Manuel Campos Sánchez-Bordona, who suggested the UK could remain in the European Union and could unilaterally withdraw from Article 50.
However, the Governor of the Bank of England (BoE), Mark Carney, warned yesterday that if the UK were to see a ‘disorderly’ no-deal Brexit, the average price of food shopping would increase by 10 per cent, but if it were a ‘less chaotic’ departure, that number would drop to 6 per cent. He stated:
“In the most extreme scenario, on average your shopping bill goes up 10 per cent.”
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After being accused of scaremongering, Mr Carney told MPs that the Brexit scenarios published last week – which also caused the pound to fall against the euro – were based on detailed preparatory work to ensure lenders and banks would be prepared, and the committee had asked for it.
Despite this, Mr Carney’s statements coincided with the pound slumping.
Today, ministers have agreed to publish the full legal advice given to the government regarding the deal after MPs were found to be in contempt of Parliament – the first time since the 1970s.
The release of a slew of positive PMI figures from the Eurozone, France, Italy and Germany this morning has done little to bolster the euro against the pound, even though the UK services PMI was poor by comparison.
Despite being accused of scaremongering, Mr Carney’s statements coincided with the pound slumping (Image: Getty)
The Markit services PMI for Britain suffered a worse-than-expected drop, from 52.2 to 50.4, despite forecast growth, although this seems to have only caused a slight blip in the GBP/EUR exchange rate.
In addition, Eurozone retail sales figures showed a 0.3 per cent rise in October against no growth at all in September and beating expectations of a lesser rise.
The poor showing for the UK services sector will be of concern to Sterling investors as it could indicate a slowing of GDP in the fourth quarter – with any divergence between UK and Eurozone growth stats likely to be analysed in detail by GBP/EUR traders in the days ahead.