The GBP EUR exchange rate traded below the 1.1600 level after a jump in Spanish inflation figures. The latest figure for prices was above 10% for the first time since 1982. In the UK, Chancellor Rishi Sunak was urged to cut fuel duty again after claims of ‘pump fiction’.
The GBP to EUR is trading at 1.1580 as euro strength persists but there is data ahead that could boost the pound.
Spanish inflation was above 10% for the year
Spanish inflation figures jumped to 10.2% for June, marking the highest levels since April 1985. On Wednesday, data from the National Statistics Institute (INE) showed on a big increase from 8.7% last month and a forecast of 9.0%.
Core inflation, which removes food and energy prices, rose to 5.5 – the highest since August 1993.
“The news of the last few weeks is not positive … Russia’s gas and oil export cuts are accelerating rising energy prices,” Economy Minister Nadia Calvino said.
Prime Minister Pedro Sanchez oversaw the approval of another 9 billion euros in support for poorer households to cope with the price pressures.
A speech from ECB Chief Christine Lagarde said that the Bank would act in a “determined and sustained manner” to tackle inflation across the Eurozone.
The ECB is set to raise interest rates at their next policy meeting in line with other central banks. Inflation numbers were expected for Germany later on Wednesday with a jump to 8% forecast for Europe’s largest economy.
Sunak urged to tackle ‘pump fiction’ with duty cut
The AA motoring group called rising fuel costs in the UK ‘pump fiction’. With a reference to the cult film, the AA’S Edmund King said: “Pump prices are now more like ‘pump fiction’ as they don’t reflect the general downward trends we have been seeing in wholesale prices.”
King urged Rishi Sunak and the Government to fix the “urgent situation” after unleaded petrol hit new highs at 191.1p a litre. Diesel was close to £2 a litre at 198.96p.
Mr King said: “The Prime Minister has hinted at action, but we need more than hints. Pressure to force price transparency and a cut in duty would be a step in the right direction.”
Consumer confidence were released for the Eurozone on Wednesday, alongside speeches from the head of the European Central Bank and a member of the Bank of England. Thursday has a final reading of UK growth figures which are expected to be 8.7% year-on-year.
House prices for the UK are also due with the nation seeing a drop in the last month. Rising interest rates are again the cause as Investors hold off on new purchases as costs increase.
Tomorrow will bring retail sales for Germany and a final GDP reading for the UK in Q1. Nationwide house prices are also released for the UK with a 10.8% year-on-year figure expected by analysts as higher interest rates start to bite into the appetite for housing.
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