The Euro has fallen sharply in value against the Pound since the beginning of October.
The Euro has fallen sharply in value against the Pound since the beginning of October. Here’s why that is and what it means for you.
Why is the Euro falling?
The Euro is one of several currencies used across Europe, including Greece, France, Italy and Germany. The currency is controlled by a central bank known as the European Central Bank (ECB). The ECB’s goal is to keep inflation low and stable within the Eurozone.
The European Central Bank controls interest rates by setting a base rate. This base rate changes depending on economic conditions in Europe. When inflation gets too high or when economic growth slows down, they raise interest rates to try to combat these issues.
A rise in interest rates makes borrowing more expensive for consumers and businesses. This makes it more difficult for people to buy things like houses or cars because they have less disposable income after paying off their loans.
