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GBP v EUR consolidates for the second week running

Germany slides into a technical recession..

The £-€ rate has once again seen minimal swings in value for the second consecutive week. For Sterling sellers, this represents a consistent favourable rate level to hedge against, whilst providing a platform for potentially future further gains. Just 0.8% has been realised on the week (high and low swing), whereas we have been used to seeing on average 2% during a trading week for many years. 

Aiding the Pound's firm value this week (apart from the inflation data) is news from Germany, which has entered a recession (2 consecutive quarters in contraction). -0.5% in Q4 last year has been followed by -0.3% in Q1 this year with consumers struggling with higher prices due to red-hot inflation.

The recession is less severe than most had predicted, given Germany's heavy reliance on Russian energy and the huge supply chain issues of late. Manufacturing is a concern in the country as is the latest IMF prediction that Germany will be the weakest of the world's advanced economies this year (-0.1% v 0.4% for the UK). 

Finally, UK retail sales improved last month and beat estimates, however volumes are 3% lower than last April. The data shows consumers are spending more on retail (as costs are higher) whilst receiving less for their money..