EUR/GBP continues to plummet after Eurozone inflation data

FXstreet.com (London) - Sterling has seen its biggest climb in six months against the euro following this morning’s surprise inflation numbers for the Eurozone.

September year-on-year inflation for the Eurozone fell to 0.7 percent, according to European Union statistics agency Eurostst. This was a sharp drop from consensus expectations of 1.1 percent.

The fall fuelled expectations of a further cut in base rates by the European Central Bank in a bid to fight Eurozone labour market weakness.

The unemployment rate in the 17-nation Eurozone remained at a record high of 12.2 percent in September, with the jobless rate for those aged under 25 rose to 24.1 percent from 20 percent,

The sterling strength against the euro came despite weak consumer confidence numbers in the UK. The index from GfK showed that UK consumer sentiment declined to -11 this month from -10 in September. Consumer confidence has been weighed by rising fuel prices and the continuing decline in real wages as prices outstrip wage growth.

EUR/GBP has fallen 1.13 percent so far today to GBP0.8467.