The pound has dropped from yesterday’s figures of £1.133, trading against the euro at £1.128.

It suffered last week after disappointing manufacturing data that showed a slowing in growth, marking a seven-month low.

An increase in material costs has also been accredited to the fall from December to January.

The exchange rate could also have been affected by reports of a division within the Conservative government over the dealings of Brexit.

Pound to euro exchange rate

Pound to euro: Sterling is currently trading against the euro at £1.128

Weekend headlines suggested that many ministers were disagreeing on how the leaving of the EU was being handled.

Jacob Rees-Mogg stated that the UK had been “cowed by the EU” when it came to negotiating a deal, whilst Chancellor Philip Hammond sparked anger after stating that the relationship between the UK and the EU post-Brexit could be “very modest”.

Lord Forsyth suggested that many in the House of Lords are “sniping from behind the scenes”, threatening the Brexit deal.

Backbencher Nigel Mills also slated Prime Minister Theresa May for stalling the process. He told BBC Radio 4: “I think the frustration is that the prime minister had the right drive and the right belief when she came into office and it’s hard to see how we’re making progress on that.”

Pound to euro exchange rateBloomberg

Pound to euro: The exchange rate has fallen from yesterday’s figures

The GBP/EUR exchange rate tumbled by almost half a cent on Monday, sliding back to €1.128

Laura Parsons

Cabinet Office minister David Lidington has since spoken out regarding the disagreement, asking colleagues in the government to “come together in a spirit of mutual respect”.

With the UK leaving the EU in March 2019, the disagreement within the government is heightening fears regarding the future of the country and the trading relationship between the two.

Laura Parsons, currency analyst at TorFX, commented further on the pounds movement against the euro.

She explained: “The GBP/EUR exchange rate tumbled by almost half a cent on Monday, sliding back to €1.128.

Pound to euro exchange rate

Pound to euro: It has also been affected by division within the Conservative government over Brexit

“The pound broadly weakened as the UK’s Services PMI declined from 54.2 to 53.0 in January.

“This marked a sharper-than-expected decline in output and – in the wake of last week’s sub-par manufacturing and construction results – elicited concern that the UK economy got off to a poor start to the year.

“Sterling’s weakness was also due to further rumours of division in the Conservative government over Brexit.

“The euro, meanwhile, was supported by the Eurozone’s own upbeat services PMI. GBP/EUR could consolidate losses today if retail PMIs for Germany and the Eurozone impress.”

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