GBP v EUR to end the week 0.5% dow

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waterman

Written by Dan Waterman
December 12th 2025
UK economic data for October disappoints..

Just like September, October saw the UK's economy shrink by 0.1%.

Even though the forecast was to see a 0.1% growth result, the -0.1% outcome is of little surprise. The dark clouds over the UK economy have been there for a year now and with the outrageously public build-up to the Autumn Budget, it's no wonder consumers and businesses have tightened up. 

With August at 0% growth, it means the last 3-month figure stands at -0.2%.

Obviously the Pound has weakened today because of the negative data, but not by too much to be honest as it was a marginal miss in the grand scheme of things. Compounding could arrive next week though with jobs, inflation and of course the BoE interest rate decision and forward guidance. 

Another headwind potentially coming for Sterling is what President Trump decides to do with Venezuela (provoking land war) and Ukraine (peace deal). The latter is of course a major worry as the US could pull aid and push Europe closer to war with Russia. 

Plus then the ongoing AI bubble nervousness that just won't go away. Concerns remain because it looks like the 'big' companies are overspending on AI infrastructure at a pace not yet matched by revenue growth.

Because the Pound is not a 'safe-haven' currency, it struggles during turbulent and uncertain times.