Pound to euro exchange rate: Sterling INCREASES amid Bank of England interest rate shift
THE POUND has increased against the euro despite negative UK employment data to €1.135. The announcement of a potential interest rate hike later today could affect it.
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The pound is currently trading against the euro at €1.135, an increase from yesterdays pound to euro figures of €1.134.
This was despite a drop from last week’s positive figures which hit a six-month high following positive Brexit negotiations.
The increase is in spite of recent data showing employment figures are at their lowest in two years, with those in employment falling by 56,000.
It has also been aided by disappointing wage growth that has continued to fail to keep up with inflation rates.
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Employment rates were at their highest level in 2017 since records began
The Office for National Statistics (ONS) new figures show that the job boom which began in 2012 is beginning to drop.
Employment rates were at their highest level in 2017 since records began in the 1970’s, but has now dropped.
Other disappointing data released by the ONS shows that UK wage growth, despite slightly improving, is still struggling to keep up with inflation rates.
The increase of 2.3 per cent falls short of the expected 2.6 per cent.
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It is the seven month in a row that wage growth continues to lag behind inflation.
In light of this the Bank of England will discuss later today whether internet rates are to be unchanged following the inflation rates surging to a six year high of 3.1 per cent.
This will be the last decision regarding interest rates of 2017 following a turbulent year.
It is expected that that Monetary Policy Committee (MPC) will vote to leave rates as they are, currently at 0.5 per cent, having increased from 0.25 per cent last month.
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Laura Parsons, currency analyst at TorFx, commented on the changes to be expected in the next few days.
She told Express.co.uk: “A modest increase in UK wage growth gave the GBP/EUR exchange rate a little lift on Wednesday, but a disappointing unemployment rate figure limited Sterling’s gains.
“Today we’re gearing up for some potential significant shifts in the currency market as both the Bank of England and European Central Banks are set to deliver their last interest rate decisions of 2017.
“The best case scenario for GBP/EUR would be if the BoE offers hints of a rate hike in 2018 while the ECB maintains a dovish outlook.”
