The pound reaches the end of the month around 1.25% down on the euro. The damage was done at the start of the month with a 3% drop, since when it’s been a slow and unsteady climb upwards. Things are looking much healthier against the US dollar, however, with sterling a good 3% stronger than at the end of February.
Looking at the data, last week was a heavy one for high-level UK numbers. If you missed it, the gist was much better services PMI, stronger retail sales figures and inflation coming down. But this was all rather eclipsed by growth forecasts being halved. Retailers are optimistic at least, with the Lloyds Business Barometer finding UK retailers at their most optimistic for a decade, despite the rise in their staffing costs from the Budget last year.
This week the focus shifts to European data, and we have already had some good early numbers for Germany, with retail sales shooting upwards by 4.9% last year. Will that have fed through into higher inflation? We’ll hear at lunchtime for Germany and tomorrow for the eurozone as a whole.
And in the USA, this week we get the first jobs numbers since the Elon Musk’s DOGE (Department for Government Efficiency) started swinging the axe.
There are so many competing factors right now – the growing trade war, stagflation and, for the UK anyway, the battle for economic growth while staying inside the chancellor’s fiscal rules – that predicting the future is even more impossible than usual. Nevertheless, we are compiling predictions from all the leading banks and our new Quarterly Forecast will be out soon.
In the meantime, make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 7898 0541 to get started.
