The Great British pound recently hit a three-year high in value against the U.S dollar, suggesting signs of financial positivity in the UK.
However, against the euro, losses to the pound continued into their seventh week. The euro currently sits at £0.8386. Jane Foley, a Rabobank strategist, has pointed to inflation being stronger than predicted, but also marginally increased sales in retail, as a cause of this. Foley has also attributed the currency’s recent resilience to recent trade deals with India and the U.S. that Britain has struck.
Data from April 2025 shows British retail had a jump in sales. However, the inflation print countered the prediction for Bank of England to make a cut in June.
However, in light of Chancellor Rachel Reeves’ upcoming spending review, focus on the challenges remaining for the UK economy returns, but also the government’s pledges. Jane Foley recalls the government had proposed no raises to taxes and continued tight spending, whilst powering economic growth.
Reeves is due to set budgets for the next three year on June 11, 2025. Despite the currency’s 8% rise against the dollar and regaining of ground amongst the euro, the many ongoing economic challenges will test the currency’s overall progression.
For the UK’s SMEs, despite stronger growth outlook than previously in 2025, challenges remain volatile and businesses should utilise the economic prosperity by implementing investments and plans for longevity.
At AJL Finance, we provide a personal service that builds a relationship with our clients, while working towards a strong financial future.
