The GBP EUR exchange rate gained 23% on Monday after Germany posted its first trade deficit since 1991. Analysts expected a positive month of trade but were wrong as exports slowed again.
The GBP to EUR was trading at 1.1622 as the pair tries to hold onto support.
German trade deficit hurts the euro currency
The euro took a hit on Monday after Germany posted a trade deficit for the first time since 1991.
The current downward trend is ongoing since a high last July at around 18 billion euros surplus and there was a deficit risk. Analysts expected a 2.7 billion trade surplus, but the official number was 1 billion.
Cross-border exports declined 0.5%, compared to economists’ forecasts for an increase of 0.7%. Imports also rose with a 2.7% increase, which was higher than forecasts.
The Destatis statistics office found that Germany’s exports to Russia were up 29.4% to €1 billion in May versus April but had sunk 54.6% against May 2021.
The Russian conflict with Ukraine saw supply chains in chaos, which compounded the problems created by the Covid lockdowns
Spanish unemployment figures helped the Euro, showing a fall of -42k in jobless numbers. That was less than expected. However, unemployment in Catalonia was at its lowest since 2008.
Bank of England, civil servants accused of blocking changes
The Bank of England and civil servants stood accused of blocking anti-Brexit changes.
Cabinet sources said that the BoE is “100pc resisting cuts to red tape,” according to the Telegraph. At the centre of the allegations is the Prudential Regulation Authority (PRA) which oversees the insurance industry. The group had a slow response to EU insurance rules known as Solvency 2.
The PRA threatens to make a “mess of some amazingly important reforms,” the Telegraph source added.
A similar claim was lodged on civil servants by the UK Attorney General, Suella Braverman.
Ms Braverman said that some officials were unable “to conceive of the possibility of life outside of the EU” and were stonewalling post-Brexit changes.
“Don’t take this as an opportunity to bash the civil service. But what I have seen, time and time again, is that there is a Remain bias,” she said.
However, there was good news for the post-Brexit banking sector. British banks beat their French rivals in revenues for 2015. The threats of banking jobs leaving the City of London did not materialise. The UK sector came in fourth behind China, the US and Canada with £46billion in pre-tax profits last year.
Tomorrow brings PMI numbers for the UK and Europe, alongside a speech from BoE Governor Andrew Bailey.
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