Pound to euro exchange rate: Sterling TUMBLES as inflation hits five year high | Travel News | Travel

3 months ago

The pound has struggled to climb against the euro as recent data shows inflation has reached a five year high.

It is currently trading at €1.121, dropping from yesterdays figures of €1.129.

The newest data revealed inflation is to peak at 3.1 per cent in October, after increasing from 3 per cent in September.

Figures this high were last seen in March 2012.

The Bank of England predicts a high of 3.2 per cent before falling later this month.

With the UK’s target of 2 per cent, anything above or below this means that Mark Carney, Governor of the Bank of England, must write to Philip Hammond explaining the figures.

Inflation rates soaring has hit households hard, with wage growth struggling to keep up.

It follows on from the decision to raise interest rates to 0.5 per cent, up from 0.25 per cent, the first time in 10 years earlier in November.

Shifts within the Government have also damaged the pound’s growth, as uncertainty surrounding Theresa May increases.

It has emerged that up to 40 Tory MPs could be signing a letter of no confidence surrounding the Prime Minister.

With no progress being made regarding Brexit talks, many are wondering whether she will make the necessary decisions by the end of the year.

It also follows on from the resignation of former International Development Secretary Priti Patel and former Defence Secretary Sir Michael Fallon.

Laura Parsons, currency analyst at TorFx commented on the recent fall in the pound to euro exchange rate.

She explained: “GBP/EUR tumbled around 0.7 per cent on Monday as the pound broadly softened in reaction to the latest political jitters in the UK. 

“Reports that 40 MPs are prepared to support a letter of no confidence in PM Theresa May exacerbated concerns that the Conservative party are on the verge of a leadership contest that could unsettle Brexit negations. 

“However, Sterling could recoup some of its losses this morning if the UK’s inflation data reveals the 5-year high in consumer price pressures forecast by economists.”