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What's the latest tariff policy?
Friday’s big takeaway was that politics, not policy, set the tempo again. The US Supreme Court’s decision to curb President Trump’s use of emergency powers for sweeping tariffs has left investors trying to work out what comes next. Not whether tariffs go away. Just which legal route they come back through, and how messy the handover might be.
That uncertainty mattered because tariffs are one of the few levers that can change the inflation story in a hurry. If tariffs are dialled back, the “prices stay higher for longer” fear eases a touch. If they’re reintroduced quickly via another mechanism, markets are back to guessing what the next quarter looks like. Either way, it’s not the sort of backdrop that encourages calm, orderly trading.
Back in the UK, the domestic picture ended the week on a brighter note. Stronger retail spending and a chunky January surplus gave sterling a bit of lift, even if the bigger debate hasn’t gone away: whether the Bank of England starts trimming rates again at its next decision in March. That timing question is still the anchor for UK pricing this week.
In the eurozone, the euro’s story stayed more political than statistical. Reports around ECB leadership churn briefly unsettled sentiment, before pushback helped to steady the mood. The problem is the same as in the US: central bank credibility is easier to dent than to repair, and markets are quick to price the risk.
For Monday morning, the watch-list includes more headlines on US trade policy, and any clues on whether this week’s data keeps central banks on their current track. It’s a week where “one line” from Washington, London, or Frankfurt can do as much as a full dataset.
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GBP: Good UK news helps, but March looms
Sterling ended last week with more confidence, helped by more upbeat updates on spending and the public finances. The catch is that rate expectations are still doing the heavy lifting. The Bank of England’s next decision (19 March) remains the key date in the diary, and markets will keep weighing “better data now” against “easier policy soon”.
GBP/USD past year
EUR: Politics keeps the euro jumpy
The euro has held its footing, but with politics at its shoulder. The chatter around ECB leadership is a reminder that, even when the data is behaving, confidence can wobble when the institution looks exposed to the political cycle. Against the dollar, it’s been more about what the US does next on trade than anything the ECB can control. If markets sense that tariff policy becomes less predictable (again), the euro tends to be dragged into the crossfire.
GBP/EUR past year
USD: Dollar steadies despite tariff upset
The US dollar is caught between two forces. On one hand, the US still offers higher returns than much of the developed world, which can keep the dollar supported. On the other, tariff policy risk has a habit of leaking into inflation expectations, growth assumptions and general willingness to take risk. If tariffs are reworked quickly, markets will have to reprice the inflation path again. If it drags, the uncertainty itself becomes the story.
USD/GBP past year
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