Pound to euro exchange rate: Sterling RECOVERS but could struggle following Autumn Budget

The pound is currently trading against the euro at €1.126, an increase from last weeks figures of €1.121.

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It follows on from a steady recovery that saw it increase from €1.116 earlier in the week.

Retail sales were reported to have increased by 0.3 per cent in October, according to the Office for National Statistics (ONS).

This was much better than the estimated 0.1 per cent growth.

The three months to October also showed sales to be 0.9 per cent higher than the previous year.

ONS commented: “Second-hand goods stores (charity shops, auction houses, antiques and fine art dealers) provided the largest contribution to this growth.”

However, the announcement of the Autumn Budget 2017 later this week by Chancellor Philip Hammond could harm the pound’s recovery against the euro.

It is due to be released this Wednesday at 12:30pm.

Some of the topics to be tackled include the housing crisis, with plans to built 300,000 homes a year.

This also includes an additional £10bn more for the Help to Buy scheme.

Tuition fees are also to be frozen, in a bid to appeal to the younger voters following their high turnout earlier this year, as well as little news on pensions.

It will also include a huge push on spending in the tech industry including driverless cars by 2021 and 5G connectivity.

Laura Parsons, currency analyst at TorFx commented on the steady increase – and what it could mean for the exchange rate later in the week.

She explained: “Better-than-forecast UK retail sales data and a dip in Eurozone inflation helped GBP/EUR recover lost ground towards the close of last week. 

“With no UK news on the calendar today, the pound may cling to the €1.125 level unless a run of speeches from ECB officials offer any surprises. 

“Sterling is likely to experience volatility later in the week as Chancellor Philip Hammond delivers his Autumn budget.”

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