Sterling hits near 18-month low against the euro
With the EU referendum now announced to be taking place on 23 June, sterling has fallen against a number of currencies.
On Friday, the pound hit its lowest level against the euro since November 2014 at £1=€1.25, adding further to losses made since the start of the year. Since the beginning of 2016 the pound has fallen 8% against the euro. The fall in sterling is said to be partly in response to the period of uncertainty faced by business and financial markets between now and 23 June. In addition to the pound weakening against the sterling, it also hit a seven year low against the US dollar on 29 February. Since then, sterling has strengthened slightly against the dollar but is still residing at levels last seen in May 2010.
The weaker pound against the euro will make UK pig meat more competitive in euro-priced markets. This could, therefore, encourage increased demand for UK products. Last year the strength of the pound against the euro was driving UK pig prices down. In August, it hit a near eight-year high against the euro at £1=€1.44. In 2015, the gap between the EU pig price and the UK pig price averaged 29p/kg. The weaker pound, combined with the UK pig price slipping since the start of 2016, while the EU reference price remained relatively stable, means the difference between the EU and UK pig price has narrowed to under 10p/kg in the latest week. This all means that, although pig prices are currently close to multi-year lows, the weaker sterling in comparison to last year could give UK pig producers a bit of hope that they may strengthen in the coming months.
Millie Askew, Analyst
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