GBP EUR Exchange Rate Flat Following Marmite Price Row

October 14, 2016 - Written by Tim Boyer

STORY LINK GBP EUR Exchange Rate Flat Following Marmite Price Row

The GBP EUR exchange rate remains stable as markets appear hesitant to push it below the 1.10 barrier.

Low Value of Pound (GBP) Causes Spat between Tesco and Unilever

The Pound’s (GBP) dramatic depreciation against the Euro (EUR) following the UK’s vote to leave the EU has caused a major row between supermarket Tesco and brand supplier Unilever. Unilever had sought to raise its wholesale prices by 10% to counteract rising costs caused by the low value of the Pound in the wake of ‘Brexit’, and in response Tesco removed Unilever brands from its online store.

While ultimately the impact of the Marmite row on the GBP EUR exchange rate was minimal, it will do little to reassure investors who already worry about how the low value of the Pound will impact British businesses as rising import costs squeeze profits.

‘Brexit’ Worries to Continue Weighing on Sterling

The Pound is unlikely to make a significant recovery in the immediate future as investors remain uncertain over ‘Brexit’ and how it will impact British businesses.

Recent rhetoric from Conservative politicians appears to indicate that the UK government is pursuing a ‘hard Brexit’ as it seeks greater controls on immigration.

Meanwhile European Council President Donald Tusk has warned the UK that it will not be able to retain access to the single market if it does not accept freedom of movement. He also mocked the idea that Britain could ‘have the EU cake and eat it too’, as he said;

‘To all who believe in it, I propose a simple experiment. Buy a cake, eat it, and see if it is still there on the plate. The brutal truth is that Brexit will be a loss for all of us. There will be no cakes on the table. For anyone. There will be only salt and vinegar.’

Tusk also suggested that there was a chance that the UK might yet remain part of the EU ‘even if today hardly anyone believes in such a possibility’.

Euro (EUR) Volatile amid ECB Speculation

Recent speculation on whether the European Central Bank (ECB) will begin to taper its quantitative easing programme has caused some volatility for the Euro as markets remain unsure on the bank's position.

Traders will be eager for next week’s ECB rate decision meeting as they hope it will provide some indication of how it will move.

GBP EUR Exchange Rate Forecast: Pound to Remain Stable into Next Week

A lack of notable data from both the UK and the Eurozone is likely to cause the GBP EUR exchange rate to remain flat for the rest of week, as the UK construction output and Eurozone trade balance reports appear to have little impact on the pairing.

Traders will instead look to next week’s data for potential movements between the currencies, with both the British and Eurozone consumer price index data due out early in the week.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Currency Predictions Daily Currency Updates Euro Forecasts