Weekly Roundup: Pound slumps as business activity contracts
Amy Richards August 29th 2023 - < 1 minute read
After a wobbly start to the week, the pound began to trend lower as concerns about the health of the UK economy weighed on GBP exchange rates.
Dismal PMI readings midweek saw Sterling fall in earnest. Both the manufacturing and services reports printed below forecasts, with the latter unexpectedly showing a contraction in activity. The dire data stoked recession fears.
The following day, the Confederation of British Industry (CBI) reported that retail trade slumped at its fastest pace in two years in August, adding to worries about the UK economy.
Sterling then attempted a recovery on Friday, having entered oversold conditions, but a gloomy mood stifled the increasingly risk-sensitive UK currency’s potential.
So far this week, the pound is subdued following the bank holiday weekend.
The British currency could remain muted throughout the rest of the week amid a notable lack of market-moving UK data.
GBP investors may look to domestic headlines for fresh impetus. Could ongoing concerns about the UK’s struggling economy and cost-of-living crisis keep the pound on the back foot?
Written by
Amy Richards