Pound hits one month low against the euro

Sterling hit a one month low against the single currency yesterday, finishing the day 0.55 cents lower – the third consecutive day of losses for the pound.

• Sterling was on the back foot early in London trading following manufacturing output falling by 0.5% in May – analysts were suggesting that the sector would actually grow by 0.2% during the month.
  
• The National Institute of Economic and Social Research also stated that GDP during the second quarter has contracted by 0.4%, dashing hopes that the UK may have escaped the recession.
  
• Yesterday’s gains for the single currency were extended after figures showed German factory orders unexpectedly jumped to 4.4 percent, contrasting sharply with the weak UK data.
  
• The weak economic data emanating from the UK has raised the prospect that the Bank of England will expand its quantitative easing programme at its latest policy meeting tomorrow. Interest rates are expected to stay on hold at 0.5%.
  
• Halifax release their house price survey today within the UK, whilst the EU release their revised first quarter GDP figures. Germany will reveal their industrial production figures later in the morning giving an insight into how the sector is faring at present.