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British house prices - are they on the way up or down?
The first interesting data point of the year isn’t a positive sign for the economy, with Nationwide reporting that house prices fell 0.4% in December. That may be down to some seasonal effects but was nevertheless far below expectations of modest growth. However, Nationwide declared that house prices in 2025 were “resilient” overall.
Whether it’s good news for the country as a whole that houses become more affordable or remain resilient, may be one of the themes of the coming year as more young people appear to be heading overseas in search of better prospects.
It’s been a quiet Christmas and New Year on the currency markets – that’s not always the case – with the many year-end reflection pieces in the media reminding us what a crazy year it has been in the global economy, with tariffs and the severe weakening of the dollar.
For anyone from the USA who started 2025 looking to invest in Europe, or avoid the incoming president, they have seen their buying power weaken by 12%. But while these have not been normal times in US politics or economics the truth is that any currency is similarly at risk in any given year.
Today we’re getting final Purchasing Managers Index (PMI) results for manufacturing across Europe, the UK and USA, on a day when it was reported that Chinese EVs (electric vehicles) built by BYD are expected to outsell Tesla sales. Part of that could of course be down by Elon Musk’s personal appeal, or lack of it, but it highlights the risks to western manufacturers.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Business Account manager on 020 3918 7255 to get started.
GBP: Sterling continues near 3-month high on USD
A quiet festive season for sterling saw it maintain its position at around 1.75% stronger on USD than the start of the month and 7.5% on the start of the year. It’s not much less positive in the short-term against the euro (close to a two-month high) but 5% down on the year. We’ve got a trickle of data coming out next week, the most interesting of which will be shop inflation on Tuesday.
GBP/USD past year
EUR: No slackening in strength of EUR/USD
Since the start of summer the euro has been cruising along at high altitude against the US dollar (13% stronger than the early part of the year) and there is no sign of that slackening off just yet. Final PMI results come out today as we see how confident European businesspeople are about the new year.
GBP/EUR past year
USD: Little confidence in dollar resurgence
A new year may bring an optimistic outlook for business and individuals but it looks in short supply for a dollar already blighted by the likelihood of a more doveish Federal Reserve when Jerome Powell leaves his post as chair in the spring. Next week will be all about the labour market, with Job Openings and Non-Farm Payrolls coming out.
USD/GBP past year
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