Home Daily Commentaries Weak UK production data highlights softening economic momentum

Weak UK production data highlights softening economic momentum

Conor Fleming
Written by
Conor Fleming

Conor Fleming

OFXpert

With 30 years of experience in the foreign exchange world, Conor spearheads initiatives to encourage businesses in Germany, Switzerland, and Austria to hedge their foreign currency risks with OFX.

| Friday 14 November, 2025

Daily Currency Update

UK Industrial Production dropped 2.0% in September, far worse than the 0.2% decline expected and reversing a 0.3% increase in August. Manufacturing output also disappointed, falling 1.7% MoM compared with a forecast of a 0.3% decline. The broad-based softness in the data reinforced concerns that UK growth momentum remains fragile heading into the final quarter of the year.


Yesterday Eurozone numbers undershot expectations with Industrial Production for September rising only 0.2% MoM, well below the 0.7% consensus but still an improvement from the -1.1% decline in August. On a yearly basis, Industrial Production increased 1.2 percent, falling short of the 2.1 percent forecast and edging only slightly above the 1.1 percent recorded in the previous month.


Trading was relatively calm in the immediate aftermath of President Trump signing legislation last night that will slowly get Federal workers back to work as of today. Not-withstanding this the USD slumped right out of the gate of European trade. Dollar Index ( DXY ) losses are compromising trend support that has guided the index higher since September and, after the recent peak in the index around resistance in the low 100 zone, the technical undertone of the DXY chart looks soft. Bonds are mostly weaker while US equity futures are mixed to marginally lower.

Key Movers

Looking ahead in Europe, attention shifts to a packed Eurozone calendar later today. Traders will watch the release of the preliminary Employment Change figures and the first estimate of third-quarter GDP. The European Commission is also set to unveil its latest economic growth projections. Markets will keenly watch the data to establish if the single currency can hold onto gains made and perhaps advance further.


The pound's performance is all the more notable in that markets are completely ignoring the deluge of weaker fundamental data that was released on yesterday, including disappointing Q3 GDP data and deeply contractionary industrial production figures. Weaker growth remains a major concern of the UK as markets eye the November 26 Budget release, though markets appear to be signalling ongoing confidence in Chancellor Reeves’ ability to deliver on self imposed fiscal targets.


Recent comments from Fed policymakers suggest that there is a significant difference of opinion about the December policy decision. This has dented market confidence in the outlook for lower US rate policy. Swaps pricing reflects uncertainty about the outcome of the last Fed meeting this year, with a rate cut now no better than a 50/50 call. Our core view is that we should see continued Dollar weakness through until year end.

Expected Ranges

  • GBP/USD: 1.3115 - 1.3165 ▲
  • GBP/EUR: 1.1280 - 1.1330 ▲
  • GBP/AUD: 2.0110 - 2.0160 ▲
  • EUR/USD: 1.1625 - 1.1675 ▲

Written by

Conor Fleming

OFXpert

With 30 years of experience in the foreign exchange world, Conor first embarked on his financial career journey as a trainee dealer in BNP Paribas in the early 90s. His professional journey also took him to New York, where he assumed the role of Head of Sales with an Irish bank for a few years. During his tenure at both banks, he was invited to several interviews on Irish television to discuss market turbulence, the factors driving volatility and insights into what could be expected as events unfolded.