The Pound fell to its lowest level against the Euro since early 2021, after hawkish rhetoric from the European Central Bank strengthened the Euro while the UK’s weaker than expected GDP report failed to boost the flailing Sterling.
UK GDP grew 0.2% in July after a 0.6% fall in June, representing a return to growth. However, the results came in below analyst expectations of 0.3% growth, serving to hamper the Pound’s return to strength.
The Euro was trading at £0.86516 in late afternoon trading on Monday, with the Pound falling to £0.87215 against the currency earlier today.
“July’s rather anaemic growth came in below expectations, a factor which will add to concerns that the UK is slow marching towards recession,” said AJ Bell financial analyst Danni Hewson.
“Despite the package of support for households, which has just been announced by the government, the cost of living crisis hasn’t magically disappeared.”
“Energy costs are just one part of the equation – food prices, fuel prices and pretty much every single service we use has gone up and, even if inflation doesn’t peak at those eyewatering levels we’d been warned of, budgets are still very tight.”
