GBP EUR Pauses as Sunak Leads UK PM Race 

The GBP EUR exchange rate pauses from recent gains on a quiet trading day. The UK saw hope for cooling of inflation with a business survey. However, mortgage demand may grind to a halt. With no significant economic data set for release, the markets only have the UK leadership race with Rishi Sunak and Penny Mordaunt in the lead. 

The GBP to EUR trades at 1.1815 after touching the 1.1900 level this week on more robust growth figures. 

Sunak and Mordaunt lead the UK PM race

Rishi Sunak and Penny Mordaunt emerged as the favourites to replace Boris Johnson as the Prime Minister. A recent YouGov poll said that Ms Mordaunt is now the clear favourite with Conservative members to lead the party. 

Meanwhile, in a business survey by the Office for National Statistics, the number of businesses expecting to raise their prices fell to the lowest level in three months. Traders will look for signs that inflation will cool, and the latest figures will boost that outlook. 

The ONS said 26% of firms will raise prices over the period, down from 31%. The number reporting that they already raised prices decreased to 20% from 24%.  

The latest numbers will be a welcome boost for the Bank of England, hoping that recent moves to raise rates were successful. On Thursday, a BoE survey of mortgage lenders said they expect the most significant drop in demand since the middle of 2020. Experts warned of a cooling in the housing market after the surprise gains throughout the pandemic. 

Shell boss reiterates energy rations in Europe this winter

The CEO of giant energy Shell said that Europe could face energy rationing this winter, making for a “really tough” season. Speaking at a conference in Oxford, Ben Van Beurden stated said the region would face a significant escalation in energy prices and possible rationing in the worst case scenario.  

Van Beurden added that there was “no way of telling” whether Russia would restart gas supplies into Europe after the Nord Stream 1 pipeline was shut for its annual maintenance this week. All eyes will be on the pipeline on 21 July, when the usual maintenance period will end. 

The Irish Minister for Finance also discussed disrupting the Irish economy if gas supplies halt. Pascal Donoghue said: “Much of the recovery in our public finances is due to the continuing surge in corporate tax receipts, up 53% in the year.”  

He added that half of Ireland’s corporate tax yield is currently down to only ten companies. 

To get in touch and receive further insight into the factors that could impact your overseas payments, click the button below and complete the form on the Lumon website.

GET IN TOUCH

The post GBP EUR Pauses as Sunak Leads UK PM Race  appeared first on Pound Sterling Forecast.