UK in technical recession adds to GBP losses

Market reports
Thanim Islam
  • UK contracts more than expected in Q4
  • US retail sales and jobless claims in focus today
Sign up


Following on from that lower UK inflation, GBP continued to struggle throughout the day despite mixed comments from Governor Bailey in the afternoon. Notably there was big reversal on GBPEUR, which a day prior hit the highs seen in 2023.

USD weakened marginally in the afternoon and we saw gains on the EUR. Earlier in the day EUR GDP for Q4 came in as expected at 0.0% quarter on quarter.


Market rates

* Daily move - against G10 rates at 7:30am, 15.02.24

** Indicative rates - interbank rates at 7:30am, 15.02.24

Table - 2024-02-15T085827.680

Data points

Table - 2024-02-15T085829.714


  • EUR: ECB Lagarde, Lane, Nagel
  • GBP: BoE Greene, Mann
  • USD: Fed Waller

Our thoughts

So, there it is, the UK has been declared to be a in technical recession in the second half of last year, with the UK economy contracting by 0.3% (more than expected) in the last quarter of the year. As a result, markets have added to the amount of rate cuts expected this year by the BoE. However worth noting that recent PMI numbers indicate that the 2024 outlook for the UK economy is better, something that was highlighted by Governor Bailey recently as well. However, in the short term we feel some of the optimism on GBP will be unwound, as markets will look to take profits on GBP gains so far this year. Clients looking to buy GBP to take advantage of short-term weakness should contact the dealing desk.

US retail sales and initial jobless claims will be the focus for the rest of the day, and whether the consumer spending is supporting the resilient economy narrative in the US. So long as there is no major fall in retails sales and/or a surge in jobless claims, we expect USD to remain supported, riding on the coattails of Tuesday's inflation numbers.

Chart of the day

Earlier this week, GBPEUR hit the 2023 highs where EUR the buyers took control once again following the higher than expected inflation numbers. Today's GDP numbers are continuing to see further falls in GBPEUR, and we look for a move to the mid-January levels were the pair should garner support once again.

15022024 cotd
Source: Bloomberg Finance L.P.

How we can help

Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 17 years we’ve helped over a million customers and last year alone processed over £9.1bn. We’re tried and trusted, and we’re ready to help you.

Have a great day.


Expert insights on demand

Sign up to our daily market reports to get the latest news and insights on worldwide currency movements straight to your inbox every morning.

Enter your email address below to subscribe.