Boris in the headlines
Much of the news this weekend has centred on the row between prospective Prime Minster Boris Johnson and his girlfriend Carrie Symonds last week which blew up when police were called to the scene after neighbours recorded the argument and contacted the police. The development is topical and relevant for the for GBP vs EUR pair as some will argue it could reduce Boris Johnson’s chances of becoming Prime Minster. Others state the fact that the argument shouldn’t have been recorded in the first place and it makes no difference anyway. The pound remains something of a political currency at the moment with so much division and the pace of change taking place in British politics.
Tory leadership contest: Varied approaches to resolving Brexit
As the leadership contest continues Mr Johnson will likely be judged not just on his policies to run the country but also on his handling of this recent situation. Boris Johnson has made clear that he will put the no deal outcome back on the table to try and focus minds and ultimately reach an agreement with the EU by the deadline of 31st October. His stance differs from rival Jeremy Hunt who is seen to seek a softer approach to Brexit. If Boris Johnson can navigate around the recent media interest and brush the row issue away then the pound could see further falls if he is able to push through his vision of Brexit as Prime Minister and categorically leave the EU by 31st October. Those with pending requirements would be wise to plan around this leadership contest as the Brexit deadline drawers closer.
Pound to Euro rates affected by recent Economic data
UK Gross Domestic Product (GDP) figures are released on Friday and could make for a volatile end to the week for pound to euro rates. The Bank of England has recently cut the growth forecasts for the UK economy citing global uncertainty stemming from the US China trade war and Brexit as significant factors. Growth has now been forecast to fall from 0.2% to 0% which takes Britain that little bit closer to a recession. Any fall in GDP beyond expectation would likely see a fall for the pound vs euro exchange rate.
For the Eurozone the Italian crisis develops with reports that the government which to bring the Bank of Italy under political control rather than being independent. The development comes at a time when relations are being tested between Italy and the EU over the level of debt that Italy holds and its desire to increase the budget deficit further which is at odds with EU rules. Expect more volatility for Euro exchange rates as the row escalates further.
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