European Union is facing backlash after a struggling year in economic growth. Both European Central Bank President Christine Lagarde and ECB member and head of Bundesbank Joachim Nagel expressed their concerns for EU moving forward. With the European Union underperforming and falling behind other countries when it comes to generate new economic growth and manufacturing – the main areas to be affected and see less spending is welfare and defence. Christine Lagarde mentioned that EU ‘’won’t be able to generate the wealth required for the increasing spending to guarantee security, combat climate change and protect the environment.’’
Another topic that was also mentioned is how the world is becoming more divided into blocks, that can create a trade war. For the European Union it would be vital to continue offering free trade across the world to improve their economic situation and it will be vital to see how upcoming US tariffs will affect the European exports to the US. Demographics can also impact future GDP figures for Europe, seeing an ageing workforce – with expectations of a growth rate of 1.45% compared to US 2.29% leading up to 2029.
For today we do have European core inflation and inflation levels being released at 10am. In the short-term, i.e. month on month inflation levels is expected to increase by 0.3% – we need to consider that we are moving into colder months and that energy prices are starting to increase, which we have seen being a seasonal move from energy companies in the previous years to increase revenue. It’s vital for the EU to hold inflation levels down – as they’re struggling to improve their economic growth, which we have seen being a big contribution to recent EUR weakness.
GBP/EUR 1.1964 GBP/USD 1.2624 GBP/AED 4.6365
GBP/AUD 1.9453 GBP/CHF 1.1151 GBP/CAD 1.7710
GBP/NZD 2.1468 EUR/USD 1.0537 GBP/ZAR 22.8725