EUR/GBP remains stable around the 0.8300 level, with the UK macro calendar showing no major events for the upcoming week.

In February, the UK preliminary PMIs displayed weakness, with the composite at 50.5, services at 51.1, and manufacturing at 46.4. January experienced the steepest drop in private sector wage growth since 2020 due to weak demand.

Elevated price pressures are driven by high wage growth alongside an anticipated rise in national insurance contributions for employers. The UK economy shows signs of stagnation, and attention is drawn to upcoming communications from Bank of England speakers.

The quiet UK macro calendar means that the next moves in EUR/GBP will likely depend on external factors or unexpected shifts in sentiment. With no immediate economic data releases to direct momentum, the pair may continue to hover around the 0.8300 mark unless fresh catalysts emerge.

The UK’s latest preliminary PMIs painted a picture of weakening business activity. The composite index barely holds above contraction territory at 50.5. While services managed to stay in expansion at 51.1, manufacturing remains in trouble, slipping further to 46.4. These figures suggest that demand is struggling to gain traction, keeping economic activity subdued.

Pay growth has been weakening, particularly in the private sector, where January saw the sharpest year-on-year decline since 2020. This points to businesses feeling the strain and holding back on wages in response to weaker demand. Yet, inflationary pressures remain, with elevated wages and an upcoming increase in employer national insurance contributions expected to keep costs high.

The UK economy has little forward momentum. Growth appears fragile, and concerns linger around whether conditions could deteriorate further. All eyes now turn to the Bank of England, as policymakers will need to assess stagnant business activity, persistent inflationary risks, and weakening earnings.

For those navigating the derivative markets, attention should remain fixed on central bank remarks. Any shift in messaging from officials like Andrew or Huw could steer expectations on interest rates, influencing the next move for GBP-related assets. Without clear signs of recovery, markets will be sensitive to any adjustments in tone from the Bank’s speakers.

With limited UK-specific developments on the horizon, external factors—such as shifts in risk appetite or changes in eurozone data—could play a bigger role in driving short-term fluctuations. A cautious stance may be warranted, especially with market participants attempting to gauge whether the current stagnation turns into something more prolonged.