Picture by Simon Dawson / No 10 Downing Street.

Pound sterling looks to remain under pressure against the euro.

The pound to euro exchange rate (GBP/EUR) is forecast to remain under pressure this week and this should bring levels below 1.13 into play.

This as investor sentiment towards the UK is to stay fragile amidst heightened uncertainty around the contents of next week's budget announcement, while a midweek inflation release should confirm a disinflationary process is underway.

GBP/EUR dropped below 1.13 last week after the government indicated it would abandon attempts to raise income tax, triggering concerns that the public finances would remain in a precarious position.

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