Sterling edges up to fresh 17-month high versus euro after UK data

By Stefano Rebaudo

Oct 23 (Reuters) - Sterling edged up to a fresh 17-month high versus the euro on Friday, on track for its fourth straight weekly rise, after UK data provided mixed signals about the British economy.

The preliminary S&P Global UK Composite Purchasing Managers' Index rose to 53.1 in October, higher than economists’ forecasts and up from September's 52.0. 

Conversely, British consumers reined in their shopping in September, while separate data showed confidence levels plunged in October. 

The euro was roughly unchanged at 83.70 pence after reaching 83.62 pence, the lowest level since May 2025.

BofA said that not all bets against the euro offer the same opportunity, arguing the euro/pound is better priced and that it favours euro/yen and euro/Canadian dollar shorts.

Fears of new social unrest in France and elevated energy prices weighed on the single currency while strong UK data and easing fiscal concerns have recently lent support to the pound.

British Prime Minister Andy Burnham said on Friday his government's first annual budget statement due next week will give businesses "breathing space to grow". 

“The PMIs have a stronger tone than the recent retail sales and consumer confidence data,” Paul Dales, chief UK economist at Capital Economics, said.

“Taken together, the overall economy still seems to be weathering higher energy prices and higher borrowing costs well, and the worst of the rise in inflation is yet to come,” he added.

Sterling fell 0.15% to $1.3381 against a strengthening dollar after reaching $1.3418 on Thursday, its highest level since September 16.

The greenback rose on Friday after losing ground during the week as doubts about the AI investment boom fuelled expectations of a more dovish Federal Reserve. 

Some economists remained cautious about the UK economic outlook.

“The drop in retail sales volumes in September and slump in consumer confidence in October could be the first signs that the long-awaited squeeze on consumer spending from the Iran war is materialising,” Andrew Wishart, an economist at Berenberg, said before flagging that weaker spending highlights the downside risk from rate hikes.

(Reporting by Stefano Rebaudo; Editing by Joe Bavier)