GBP EUR Set for a Key ECB Rate Meeting 

The GBP EUR exchange rate has a quiet day for economic data on Monday as traders prepare for the European Central Bank meeting on Thursday. The ECB will likely raise rates by at least 0.25%. The euro could suffer if the outlook for further hikes is dovish. In Germany, business and employment leaders are concerned about winter’s energy outlook. 

The GBP to EUR opens at 1.1755 after being rejected from a rally to the 1.1900 level. 

Germany faces ‘the biggest crisis the country has ever had’

The Russian gas crisis in the Eurozone has business leaders in Germany extremely concerned. 

Rainer Dulger, the head of the Confederation of German Employers’ Associations, said the country faces the biggest crisis it has ever had. He urged honesty as it may lose the “prosperity” it had for years.  

Despite calls for more government intervention to help the economy, Dulger says that fewer interventions are preferable. He believes that the private sector always does better than the government in problematic situations, calling for more net earnings from the gross amount to enter each citizen’s account.  Dulger said that the net income of the citizens was paramount.  

Another German official warning of a crisis was Economy Minister Robert Habeck, who said a “catastrophic winter” was possible over Russian gas cut fears. 

Habeck said Germany will face a “crucial test that we haven’t faced for a long time.” 

Economists rang the alarm bell with threats of mass bankruptcies and energy rationing that could rattle Europe’s largest economy. 

Europe’s biggest buyer of Russian gas, German utility Uniper, tapped into its winter supplies after the Nordstream shutdown. 

UK leadership race enters final stages with hostility brewing 

The gloves are off for the race’s final stages for the Tory leadership and Prime Minster role.  

Speaking to Rishi Sunak, Liz Truss said he raised taxes to the highest level in 70 years. This would not drive economic growth. She also opposed raising national insurance, because the country could afford to fund the NHS. She added that raising taxes at this moment would “choke off economic growth”, preventing the UK from getting the revenue it needed to pay off the debt.  

But Deputy Prime Minister Dominic Raab said that the record of Ms Truss at the Treasury was also not golden, stating that she could answer for her policies and whether spending and headcount in the civil service increased or decreased during this time.  

Rishi Sunak presently leads the race with Penny Mordaunt in second, but Ms Truss and Tom Tugendhat picked up votes after the debates. However, the latter is still 10p. 

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