GBP EUR Still Struggling Below 1.1600 Level 

GBP EUR Still Struggling Below 1.1600 Level 

The GBP EUR exchange rate is still showing weakness below the 1.1600 level. Consumer confidence in Germany and France was seen to be at a new low in Germany and France as inflation and economic gloom weighs on the two largest economies in Europe. 

The GBP to EUR is trading at 1.1577 and I at risk of further losses if the weakness continues. 

Scotland looks to renewables to soothe price issues 

The pound sterling is struggling with the outlook for inflation with energy prices being a big weight. Scotland is looking at a scheme which would offer lower energy prices to consumers living near renewable energy sources. 

Energy experts have said that a proposed reform to the electricity market being studied by National Grid and Ofgem, could cut costs. The ‘Location, location location’ report, commissioned by Octopus Energy, found that £30billlion could be saved by 2035. 

That would boost consumers in all regions but it would have a more profound effect in Scotland due to the number of renewables projects in the North Sea. 

Head of analysis at the project said it may not be the government strategy. 

“…with the way the wholesale power market works, you don’t often see the lowest cost (for low cost renewables) because often the price gets set by the highest price, which is gas.” 

Meanwhile, the UK Chancellor Rishi Sunak has faced calls to cut the fuel duty once more. 

Tory MP Phillip Davies said: 

“Although the one he introduced was welcome, it hasn’t really been noticed by many people and therefore can I urge him to think again about a much more substantial cut in fuel duty, on a temporary basis, just as they’ve done in Germany?” 

German consumer confidence offers little hop to the euro 

German consumer confidence fell to a record low last month, according to the GfK index. 

The survey, based on 2,000 consumers, projected a reading of minus 27.4 points in consumer sentiment for July, down another 1.2 points from the June figures. 

“The ongoing war in Ukraine and disruptions in supply chains are causing energy and food prices in particular to skyrocket, resulting in a gloomier consumer climate than ever before”, said Rolf Burkl at GfK. 

Over in France the outlook was just as gloomy with the statistics office saying that consumer confidence in June fell to the lowest level since July 2013. Rising inflation pressures and a souring mood over the economy have dragged these indices lower. It was the sixth month in a row that numbers had plummeted. Thursday will have retail sales figures released for Germany and that is likely to show the same trend with consumers cutting costs due to rising costs. 

Consumer confidence will be 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 and investors are holding off on new purchases as costs increase. 

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