Pound to euro exchange rate: Sterling falls AGAIN following UK government tensions
The pound has plummeted against the euro following recent inflation rates and political uncertainty in Theresa May’s government.
It has fallen from €1.121 to €1.115, as disagreements among cabinet members regarding Brexit continue.
According to the Times, a leaked memo from Foreign Secretary Boris Johnson and Environment Secretary Michael Gove has increased tensions after they staged an intervention regarding whether the government is ready for the EU exit day.
Along with the recent inflation rate reports, sterling has continued to struggle.
The Office for National Statistics (ONS) reported that inflation rates have remained steady in October.
They were expected to rise as high as 3.2 per cent, as predicted by the Bank of England.
By staying steady, Mark Carney, the Bank of England governor, has avoided having to write to chancellor Phillip Hammond explaining the increase.
This is something that he must do if the inflation rates go above or below the UK’s target of 2 per cent.
Yet food price inflation has increased, with groceries including non-alcoholic drinks at it’s highest in four years.
The worst increase has been of vegetables, which are up 5.7 per cent from twelve months ago which is sure to hit family Christmas dinners this year.
On average, food prices are 0.6 higher than in the previous month.
Supermarkets are struggling to keep costs low for customers due to the soaring cost of essentials.
Laura Parsons, currency analyst at TorFX: “A disappointment UK inflation report added to the pound’s woes on Tuesday and GBP/EUR lost 0.7 per cent during the European session.
“The pairing fell back to €1.115 amid speculation that easing consumer price pressures will encourage the Bank of England (BoE) to keep interest rates on hold for longer.
“If today’s UK wage data shows stagnant average earnings the pound could post further losses.
“Current political concerns are also likely to keep Sterling under pressure.”