ECB (European Central Bank) did raise their interest rates levels by 25 basis points yesterday. European interest rate is now sitting at 2.25%, it was the first time since back in 2023 that ECB had to increase its levels after concerns of increasing inflation levels. There were no surprise yesterday that ECB had to act and change their monetary policy, therefor we did not see big fluctuations on markets as it was already priced in. The outlook from ECB is now that the future remains uncertain and with upside risk for inflation, while economic growth patterns has been downgraded. As well markets were anticipating comments on upcoming meetings, if ECB would set a tone on their future guidance. Lagarde did comment that they’re not pre-committed for a rate path and will analyse data ahead of upcoming meetings.
The UK economy did contract slightly in April, as the conflict in Middle East started to show signs of impact on businesses. A contraction of -0.1% for the month, with businesses mentioning that rising costs have affected turnover. It was the first time since August last year that GDP figures contracted month-on-month. It was also forecasted to come in at -0.1%, after March over achievement. Manufacturing production for the UK fell sharply month-on-month from 1.2% to 0.4%. Even if we saw a decline for the manufacturing sector it did outperform its expectations which was set at -0.2%.
GBP/EUR 1.1569 GBP/USD 1.3395 GBP/AED 4.9208
GBP/AUD 1.9034 GBP/CHF 1.0657 GBP/CAD 1.8735
GBP/NZD 2.3001 EUR/USD 1.1566 GBP/ZAR 21.7944