The pound had another rocky day on Monday as snowballing concerns over the impact of American trade tariffs rippled through currency markets. GBP/EUR lost half a cent from where it ended last week and paired that with an even greater fall of over 1% against the US dollar.
Stocks tumbled across the world to start the week during volatile trading. In the afternoon, rumours swirled that Donald Trump was mulling a 90-day freeze on all nations facing tariffs (except for China, which he threatened with an extra 50% tariff). The White House would later dismiss the freeze as “fake news”, but there remained a deep feeling of uncertainty around the economic landscape.
Amid all the talk of tariffs, the German trade surplus widened to €17.7bn in February. That came in slightly below expectations and might be explained by increased exports to the United States, with US companies likely having increased overseas orders ahead of last week’s announcement.
Sir Keir Starmer used a visit to the Jaguar Land Rover factory in Birmingham to reiterate his commitment not to raise income tax, VAT or employee national insurance contributions. The prime minster also responded to the rumbling trade war: “Nobody is pretending that tariffs are good news… 25% tariffs on automotive exports and 10% on other goods, that is a huge challenge for our future, and the global economic consequences could be profound.”
House prices in the United Kingdom dipped unexpectedly in March. The Halifax house price index showed average prices dipped by 0.5% compared to February, an outcome some commentators attributed to the end of the stamp duty holiday.
Bank of England governor Andrew Bailey has been elected the next chair of the world’s financial stability watchdog, the Financial Stability Board. Bailey will occupy his duties alongside his work at the Bank and faces immediate pressure in the global financial system.
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