The GBP EUR exchange rate opens the week above the 1.1650 level as the votes get counted in the German election. Monday will also see the latest consumer confidence release for the German economy. Angela Merkel’s party had a difficult night at the election but may still share the victory.
The GBP to EUR will have further German data this week with employment and inflation numbers.
German election result still uncertain
Germany is set to have its first government with three parties after Angela Merkel’s CDU/CSU bloc party faced its weakest post-war election result.
Germany’s center-left Social Democrats and the departing Merkel ‘s center-right bloc both staked their claim to lead the country’s next government after early projections showed the CDU heading for its worst-ever result.
The outcome is likely to see Europe’s largest economy undergoing lengthy negotiations to form a new government, with Merkel staying in a caretaker role until a successor is sworn in. A three-party coalition, with the Greens and Free Democrats appearing to be the likeliest route to power for both leading candidates.
It has been suggested that Germany could face months of talks to form the coalition government with Merkel staying in place until they are complete.
The Social Democrats’ Olaf Scholz, the outgoing vice chancellor and finance minister, looked happiest with the result after pulling the party out of a long slump.
The result was largely expected by polls and the GBP to EUR may not move much in the near-term until the successful coalition lays out spending and tax plans.
Boris Johnson calls in military as panic buying of petrol hits UK
Boris Johnson is preparing to call in hundreds of soldiers to tackle a fuel crisis with at least half of petrol stations outside the motorway network having run out of fuel after Britons engaged in panic buying.
The prime minister will meet senior ministers on Monday to discuss the latest data following the disruption to fuel supplies caused by a scarcity of HGV drivers. One government insider said: “The situation in England is very bad.”
Johnson is said to be considering plans to use the army to drive tankers around the country. Petrol sales were said to have increased by up to 180% on normal levels due to the panic buying.
Brian Madderson, of the Petrol Retailers Association, said a survey of members on Sunday indicated 50 to 85% of all independent service stations had now run out of fuel.
The government announced on Sunday evening that it would temporarily exempt the energy industry from the 1998 competition act, which will see companies sharing information and prioritising deliveries to areas of greatest need.
Madderson said what had been a “manageable issue” of localised shortages at a small number of retail sites spiralled out of control after media reports of supply problems had set off panic buying by motorists.
The GBP versus the euro will look to German consumer confidence today for direction.