EUR/GBP hovers around the 0.8300 mark – Danske Bank

EUR/GBP continues to hover around the 0.8300 mark with an empty domestic macro calendar for the week ahead, Danske Bank's FX analyst Jens Nærvig Pedersen reports.

UK economy remains stalled

"The UK preliminary PMIs for February came in to the weak side with composite at 50.5 (cons: 50.6, prior: 50.6), services at 51.1 (cons: 50.8, prior: 50.8) and manufacturing at 46.4 (cons: 48.5, prior: 48.3). On employment, January showed the sharpest decline in private sector wage growth since 2020 due to weak demand and rising payrolls costs."

"Price pressures remain elevated due to high wage growth and the impending increase in employers' national insurance contribution (NIC). Following a stagnation in the second half of 2024, the UK economy remains stalled according to the PMI release."

"While a rise in the minimum wage in April will be a supportive combined with easier monetary policy, the rise in employers' NIC remains a risk for the labour market and by extension, growth. This week, keep an eye out for a number of BoE speakers out on the wire."