The GBP EUR exchange rate nudged higher on Monday as traders absorbed recent events. There is little economic data available this week so the pair will move based on recent events and news headlines. Today sees PMI business activity data but it’s a final reading for September and may not drift too far from previous estimates.
The GBP to EUR trades near 1.1690 but investors are wary of the pound after recent failures above this level.
UK could face a ‘challenging winter’
Chancellor Rishi Sunak has said the government is “determined to do what we can” to mitigate the impact of the fuel supply crisis and supply chain issues.
Speaking to the Daily Mail, Sunak said that he couldn’t make promises about Christmas being unaffected by the current issues, but that the UK could still think about the future with “a renewed sense of confidence and optimism”.
Sunak said millions of families are now facing a “challenging” winter and that the current supply chain bottlenecks could continue for months.
He said: “These shortages are very real. We’re seeing real disruptions in supply chains in different sectors, not just here but around the world. We are determined to do what we can to try to mitigate as much of this as we can.”
The Government has claimed this week that the demand for fuel has normalised, but that some parts of the country still face challenges. The Petrol Retailers Association said that 22% of filling stations in and around London were still without fuel and the group said it might take a week to get stocks back up to normal.
Andrew Higginson, Chairman of Morrisons, said the supply crunch had been well publicised but was “slightly overblown”, saying that he expected no disruption to Christmas deliveries.
Fuel and energy crises a result of PM’s ‘extremist’ green policies
Political writer Brendan O’Neill has said that the current fuel and energy crisis in the UK are a result of Boris Johnson’s “extremist” green policies, rather than Brexit.
“The media class here blames everything on Brexit. There could be an earthquake in the UK and they’d blame it on Brexit,” O’Neill said.
“Everything is Brexit’s fault – they have this pathological loathing of Brexit.”
The political analyst blamed the lopsided rush to green energy as the real problem in the UK as the Prime Minister chases aggressive net zero goals, which some claim are unattainable.
Analysts at Oxford Economics have warned that the energy crunch could last into 2022 as UK reserves stand at 72 per cent, well below the five-year average of 88 per cent. Production problems at North Sea gas producers have made the problem worse, “hampering restocking in time for the winter season”.
The GBP v EUR is making a move for the 1.1700 level but the pound has found resistance above 1.18 on two occasions this year and may struggle to get much higher in light of the current supply worries.