GBP to Euro Exchange Rate Declines on Weak UK Data
The gbp to euro exchange rate was lower in Friday’s European trading session, reserving gains made in Thursday’s trading. The British Pound has been on a steady decline over the last few months making European travel and buying euros a more expensive experience. Since an April 8th high of 1.548, the gbp to euro exchange rate has fallen to today’s current price of 1.1107, down 0.13 percent on the day so far at time of writing,
Holiday makers and travelers have had to put up with less bang for their buck over the summer, as Brexit uncertainty, along with weak UK data releases, have played heavily upon the GBP. Thursday’s rally to 1.1132 from 1.1109 on the back of disappointing Eurozone manufacturing sector activity, proved short-lived as BDO reported that its monthly High Street Sales Tracker (HSST) showing that British shops posted their worst August for three years.
Sales fell 2.7 percent in August from the same time last year, making it the seventh consecutive month that sales in stores have recorded a decline. The record-breaking heatwave over the summer saw shoppers stay away from the high street, and prefer instead to do their shopping online. A 13.7 percent increase in online sales was reported by BDO for August. The heatwave has not, however, deterred visitors to the UK, as the British Tourist Board recently reported a record year-to-date for inbound tourists to the UK, with growth forecast to continue throughout 2018.
Spurred by a declining gbp to euro exchange rate, inbound visitors from EU countries reached a record 19.6 million visits from between January 1st until September1st, making it a 4 percent increase from the same time last year. EU visitors constitute the largest visit-generating region for the UK. A declining gbp, along with the hot weather, has made the UK an increasingly popular destination for European visitors Meanwhile, travelers from the UK to European destinations have found the gbp to euro exchange rate less favourable for them.
Spain saw its biggest decline in international visitors for eight years, as 4.9 per cent fewer visitors from overseas chose Spain as their holiday destination. The UK is Spain’s biggest source of overseas tourism, with 6.2 million visitors to Spain from the UK, annually. The falling gbp to euro exchange rate has made vacationing in Spain more expensive for UK holiday makers, with many now seeking more domestic alternatives.
The Bank of England’s decision to raise interest rates from 0.50 percent to 0.75 percent has not had the desired effect of boosting the GBP as had ben hoped. There is talk of the Bank of England raising interest rates again within the coming months, giving UK holiday makers to EU countries a better exchange rate and a better deal. However, with confidence in the UK business community at a low due to Brexit, the British economy, the world’s fifth largest economy, may be considered too fragile for another rate increase quite so soon, highlighted by today’s high street numbers.