Strong UK Data Lifts Sterling, Weighs on EUR/GBP

Key Moments

EUR/GBP Slips as UK Data Favors the Pound

EUR/GBP moves lower on Friday, with the cross pressured by a run of stronger UK economic data that is underpinning the British Pound (GBP). The pair trades around 0.8733 at the time of writing, down roughly 0.13% on the day, though it still looks set to register a third straight weekly advance.

The latest figures from the United Kingdom have offered fresh support for Sterling, overshadowing otherwise positive Eurozone readings and limiting demand for the Euro (EUR) in the cross.

UK Retail Sales and PMI Data Exceed Expectations

According to data from the Office for National Statistics (ONS), UK Retail Sales rose 1.8% month-on-month in January, well above the 0.2% forecast and accelerating from the 0.4% increase recorded in December. On a yearly basis, Retail Sales climbed 4.5%, compared with a downwardly revised 1.9% (previously 2.5%), comfortably beating expectations of 2.8%.

Survey indicators also pointed to improving momentum. Preliminary S&P Global PMI data showed the Composite PMI advancing to 53.9, a 22-month high. The Manufacturing PMI increased to 52.0, its strongest level in 18 months, while the Services PMI held in expansion at 53.9. All three measures came in above market forecasts.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said the survey data are consistent with GDP rising by just over 0.3% in the first quarter if momentum is sustained into March. He added that while the upturn continues to be led by the services sector, there are signs manufacturing is regaining traction, with export orders surging at a pace not seen since the pandemic.

Eurozone HCOB PMIs Also Beat Forecasts but Offer Limited Support to EUR

In the Eurozone, HCOB flash PMI readings also surprised positively but failed to provide lasting backing for the Euro against Sterling. The Composite PMI increased to 51.9 in February from 51.3 in January, ahead of the 51.5 consensus and marking a three-month high.

Manufacturing activity returned to expansion, with the Manufacturing PMI rising to 50.8 from 49.5, beating expectations of 50.0 and reaching a 44-month high. The Services PMI edged up to 51.8 from 51.6, though it came in slightly below the 52.0 forecast.

The survey reported that, at the composite level, Germany posted a solid rise in business activity, the fastest expansion in four months. France, by contrast, showed broadly unchanged output compared with January. Across the rest of the Eurozone, activity continued to grow, but at the slowest rate since June 2025.

Pound Performance Against Major Currencies

Intraday moves in the foreign exchange market show the British Pound trading firmly against several major counterparts, with particular strength versus the New Zealand Dollar.

The table above shows the percentage change of the British Pound (GBP) against selected major currencies today, with the Pound emerging as the strongest versus the New Zealand Dollar. The heat map framework indicates that the currency listed on the left side is the base, while the one along the top is the quote. For example, selecting the British Pound on the left and moving across to the US Dollar cell gives the performance of GBP (base)/USD (quote).