A solid week for risk assets – Sterling Update

A solid week for risk assets – Sterling Update

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


According to the ONS, the UK economy expanded by 0.2% during August, at the same time revising July’s drop lower from -0.5 to -0.6%. Helping to drive the recent increase has been a rebound in the construction industry, coupled with a surprising boost among auto manufacturing. Whilst the rebound during August looks encouraging, the data is only an initial estimate, and could still be subject to revisions further down the line.

Having had a fairly downbeat expectation for UK output during the ill-fated Truss/Kwarteng era, the IMF have also steadily increased their expectations for the UK economy, and they now expect GDP to increase by around 0.5% throughout next year. However, they still believe that the UK will underperform growth of every developed nation including Russia, Germany and Italy over the period, and the risk of stagflation remains real.

In other news, the latest updates on Manufacturing and Industrial production continue to highlight a challenging backdrop, with both metrics falling further over the past month.

In spite of the obvious challenges facing the UK economy, the pound has found some worthy support over the past two weeks, with GBP/USD rising from a cycle low of 1.2050, to as high as 1.2337 earlier in the week, before moderating yesterday (Thursday). During that time, GBP/EUR has also risen steadily towards 1.1600, giving the pound a slight edge over the single currency.

It is a big week for incoming UK economic data next week with the latest Inflation, employment and Retail Sales data all set to impact the pound’s short-term profile.


Inflation in Europe’s largest economy has now fallen to its lowest level since the start of the Ukraine war. Harmonised CPI rose by 4.3% on an annual basis in Germany during September, according to preliminary data released earlier in the week. Among the data, food price gains have remained robust, rising by 7.5% on an annual basis, against a sharp decline in energy costs over the same period.

Just a day later, the German government cut the prospects for growth, forecasting Germany’s economy to contract by 0.4% throughout this year. In their last update back in April, the government had been expecting the economy to expand by around 0.4%, which perhaps highlights the difficult year for the economy, as it has struggled against high inflation and an ongoing slump in manufacturing, even if lower energy costs may have had less of a detrimental impact. In their latest update, the IMF expect Germany to be among the weakest performing major economies throughout next year, especially if global manufacturing remains constrained.

At the time of writing, EUR/USD has remained fairly flat overall through this week, initially moving back over 1.0600 in conjunction with a broader rally in risk assets, however, the pair has since surrendered much of those gains in the immediate aftermath of the US CPI data.

Looking ahead, the latest inflation updates will be released in France, Spain and Italy over the next few days, with an update on regional inflation released next Wednesday.

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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