The pound is currently trading at €1.116, an improvement compared to yesterday.
Figures by the Office for National Statistics (ONS) show that the UK wage growth is struggling to improve.
Weekly earnings for three months prior to September rose 2.2 per cent, which is down from 2.3 per cent in the previous period.
This is despite the inflation rate for September being 3 per cent, therefore lagging behind.
The wage growth difficulty is hitting households hard, as food and fuel costs continue to increase as well.
Despite this, unemployment remains at a 42-year low, at a rate of 4.3 per cent.
This is the lowest since 1975 and down by 0.5 per cent compared to last year.
The ONS also showed figures of productivity increase, up 0.9 per cent in the last three months, which is the strongest in six years.
Laura Parsons, currency analyst at TorFX explained what this means for the exchange rate as the recent figures are announced.
She commented: “GBP/EUR briefly dipped below €1.110 on Wednesday in reaction to mixed UK employment data.
“Average earnings picked up ever-so-slightly but remain a long way below the rate of inflation.
“The fact that the level of employment declined also weighed on Sterling slightly, despite the fact that the unemployment rate held at an over 40-year low.
“Meanwhile, the euro was supported by the news that the Eurozone’s trade surplus widened in September.
“The pound could extend losses against the euro today if the UK’s retail sales report shows the slump in consumer spending forecast by economists.
“Retail sales including auto fuel are believed to have risen 0.2 per cent on the month but fallen -0.5 per cent on the year.
“An uptick in the Eurozone’s consumer price index would also keep the GBP/EUR exchange rate under pressure.”
