A positive end to the week for sterling saw it set yet another seven-year high against the euro, while resisting further losses against the US dollar. With markets still fluctuating following the stimulus package announced by the European Central Bank (ECB) on Thursday, sterling performed strongly as retail sales in December showed a surprise 0.4% increase.
The week ahead is set to continue to be dominated by the situation in the Eurozone. Despite this, preliminary UK economic growth figures for the fourth quarter of 2014 on Tuesday does have the potential to affect markets. With the Eurozone economy struggling to kickstart growth throughout its member states, a better-than-expected growth figure than the 2.8% forecast could see sterling strengthen further. Aside from this, housing inflation and consumer confidence figures will provide some further insight into the direction the UK economy is taking.