Sterling Update: Pound holds steady amidst economic storm

Here’s the latest currency news from our partner Moneycorp, to help you find out what your money is worth.


Last week was a tough data week for the UK economy. The average earnings, excluding bonuses, were up 5.8% year-on-year for the previous three months of 2023, UK inflation held at 4%, which is still double the target rate, and GDP for Q4 showed that the UK was in a technical recession in the second half of 2023. However, as inflation is behaving as expected and the Bank of England’s interest rate forecasts are staying steady, the pound has remained relatively flat.

The week ahead promises further fallout from the two recent UK by-election results, with the Conservatives losing by a significant swing against them, which does not bode well for the UK general election due at some point in the latter part of this year.

In terms of data releases for the UK this week, on Monday, we saw Rightmove’s House Prices Index released, with house prices continuing to increase for a second month this year; this follows two months of decline at the end of 2023. According to February’s data, house prices increased by 0.9%, which was below January’s growth of 1.3% but could indicate a return to health for the housing market. Agreed sales were also 16% higher than the same month last year, and new listings and buyers’ enquiries increased by 7%.

The rebound comes as mortgage lenders have already begun to cut rates in anticipation of the Bank of England heading towards a base rate cut towards the middle of the year. Two-year fixed rate mortgages have already seen a 0.37% drop since the start of 2024.

On Thursday the latest data from the UK’s Manufacturing and Services Purchasing Manager’s Index (PMI) was released. This is an important indicator for investors who will be looking for signs as to whether the situation is improving in the UK following a long period of stagnant growth.

The Manufacturing PMI was forecast at 47.5 but came in slightly below expectation at 47.1, but still increased from last month’s reading of 47.0, and the Service PMI is expected at 54.3. Most importantly, the maintained strength of the services data could indicate the private services industry, which includes finance, insurance, communications and non-retail consumer companies, has an optimistic outlook for the year after it posted the strongest reading for six months in January.


It’s been a quiet few weeks for the euro with no key data releases recently; as such, any movement has been more dependent on the other side of the currency pair.

This week, we saw the latest Euro Area Consumer Confidence, a leading indicator of consumer spending, released on Wednesday. Consumer Confidence in Europe hasn’t been above the critical 0 threshold that indicates optimism since May 2018. As expected, it remained flat at -16 from last month when it came in below forecast.

We also saw Manufacturing and Services PMI data from France, Germany and the EU as a whole on Thursday. The data was expected to continue to creep upwards, with both France and Germany forecasting slight gains in last month’s readings in both industries. France’s PMI data came in above expected, posting 46.8 for Manufacturing and 48.0 for Services, ahead of the forecast readings of 43.5 and 45.7, respectively.

Germany’s data was more mixed, coming in below expectations for Manufacturing at 42.3 and slightly above for Service at 48.2.

As they are two of the biggest EU economies, their results were reflected in the overall Manufacturing and Services PMI data, which landed at 46.1 and 50.0. This was the first time the Eurozone Services data wasn’t below the key 50 threshold that separates growth and contraction since July last year. The majority of readings, however, remain below 50, indicating continued industry contraction.

The latest inflation data for January was also released for the euro area yesterday, showing that it had fallen to 2.8%. This puts inflation back on its downward trajectory after a slight increase in December. This week’s data could continue to negatively impact the euro as markets become more confident that the ECB will be the first to begin its rate-cutting cycle, which could happen as early as April.

Why Moneycorp?

With a Platinum Trusted Service Award 2020 from independent review site Feefo and 40 years of experience in the industry, FrenchEntrée has been recommending Moneycorp for more than 15 years. During this time they have helped thousands of client planning the best way to pay for their property as well as supporting them afterwards with any further payment from paying bills, mortgages to repatriating UK pension payments for those who have retired to France.

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Furthermore, we have worked with the same person at Moneycorp for more than a decade! You might be familiar with her as she often writes for our French Property News magazine. She has 13 years’ experience in foreign exchange, and is a qualified European lawyer with experience in European transactions. Mar will be happy to answer any questions or enquiries to support you through these difficult times

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