Sterling Stumbles as Government Borrowing Surges to Record Levels

The Pound-Euro exchange rate has been volatile in recent days, influenced by various economic indicators. On Tuesday, Sterling wavered marginally lower against the Euro, trading at around €1.1650. This movement was largely driven by the UK's latest government borrowing figures, which showed a public deficit of £18.3bn in August - significantly higher than market expectations.

The CBI's manufacturing data was stronger-than-expected, however, and helped to partially offset the concerns about government borrowing. Additionally, a drop in oil prices eased energy security concerns across the Eurozone and provided some support for the single currency.

Looking ahead, the preliminary PMI results from both the Eurozone and the UK will be closely watched on Wednesday. If these releases match expectations, Sterling may remain subdued against the Euro. However, any unexpected results could lead to significant movement in the Pound-Euro pair.