Sterling reached a 17-month high against the euro on Monday, Reuters reported, while the UK faces a run of inflation data, a budget and a central bank decision.
Reuters said the euro touched 83.95 pence before later trading at 84.11 pence, with sterling up 0.25%. The European Central Bank (ECB) set its Oct. 19 reference rate at €1 to £0.84205, down from £0.84385 on Oct. 16. The ECB’s daily figure is a reference measure, while Reuters’ prices are intraday market quotes; it confirms the direction of the move but not the reported session low.
Reuters linked euro weakness to unrest in France and elevated energy prices. French Prime Minister Sébastien Lecornu said Monday he had directed prefects to arrange partial, local curfews after the Oct. 17 events. He also outlined a dedicated fund for businesses affected by the unrest. The French government identified shops and their employees as groups needing support.
The euro’s pressure against the U.S. dollar during the same unrest was covered in EconoTimes’ earlier report on French unrest and currency markets.
The Office for National Statistics (ONS) estimated UK gross domestic product grew 0.1% in August from July and 0.7% in the three months through August compared with the previous three months. Its September look-ahead indicators showed wholesale electricity and gas prices were more than double their levels a year earlier.
The Bank of England held Bank Rate at 3.75% in September. Six policymakers backed keeping it unchanged, while three supported a 0.25-percentage-point increase. Bank of England Governor Andrew Bailey said, “Indirect energy pass-through has so far been weaker than we had expected.”
UK consumer inflation data for September are scheduled for Wednesday, Oct. 21. Chancellor John Healey’s budget is due Oct. 28; he said it “will be built on fiscal discipline.” An updated fiscal forecast is also scheduled for release on the budget date. The Bank of England’s next rate decision is scheduled for Nov. 5.
