Sterling weakened yesterday as the UK’s flash PMI cooled sharply. A composite PMI of 51.0 isn’t a disaster, but it’s a world away from February’s 53.7, and markets will see this sudden drop as a warning shot. The other sterling issue is energy costs. If they keep feeding into prices, interest rate expectations can support the pound one day and hurt it the next, depending on whether people focus on “higher rates” or “higher recession risk”. Coming up on Friday, retail sales and the GfK Consumer Confidence, both good barometers of consumer mood.
GBP: PMI reality check
Christopher Nye
on March 25th, 2026 
