Sterling enjoyed a promising start to the last significant week of 2024. Positive UK services data, coupled with some less chipper news from the land of European manufacturing, allowed the pound to add half a cent against both the euro and the US dollar.
This morning’s UK unemployment numbers gave the pound an early boost. Joblessness remained unchanged at 4.3% in October, in line with market expectations. GBP/EUR and GBP/USD had each added a third of a cent at the time of writing.
The monolithic German manufacturing sector’s troubles limited any euro momentum that may have emerged on Monday. December’s preliminary numbers pointed to another month of negative growth, although news that services PMI had climbed did at least soften the blow.
According to Make UK, a British manufacturing trade body, manufacturing confidence fell at its sharpest rate since the pandemic following Rachel Reeve’s Autumn budget. After showing signs of improvement, the budget brought sentiment to “a shuddering halt”. Make UK now expects the manufacturing sector to contract by 0.2% in 2024, down from a tiny expansion last year.
China’s retail sales slumped to 3% in November, far below the expected 4.5% growth. There are growing fears that the government’s latest stimulus measures are not doing the trick, although robust industrial production figures suggest otherwise. The Chinese yuan fell slightly after the news broke but recovered its footing over the course of Monday.
The European Union has launched a €10bn space programme intended to rival Elon Musk’s Starlink. The UK will not take part in the scheme, which aims to ensure technological and cyber security against a growing backdrop of threats.
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