Foreign Exchange Market Update

May 1, 2026

United Kingdom (U.K.)

British Pounds traded at 1.3624 against USD at 9:00 AM PST

U.K. mortgage approvals rose in March, reaching a four-month high, while consumer credit logged its fastest growth since early 2024. The number rose to 63,531 from 62,708 the previous month, according to the Bank of England (BoE). The 'effective' interest rate, which is the actual interest paid on newly drawn mortgages, slowed to 4.03% in March from 4.1% in February.

This week, the BoE left its key interest rate unchanged at 3.75% but cautioned that there is a risk of material second-round effects from the energy price shock, which could lead to future rate hikes. Previously, they had reduced the rate by 25 basis points each in August and November last year.

Mortgage lending increased to GBP 6.2 billion in March from GBP 5.2 billion in February. However, the annual growth rate of lending eased to 3.0% from 3.4% in February. Consumer credit dropped slightly to GBP 1.9 billion from GBP 2.0 billion in the previous month. Nonetheless, annual growth in consumer credit rose to 8.9% from 8.6% in February. Net borrowing through credit cards remained unchanged at GBP 0.7 billion and net borrowing through other forms of consumer credit dropped to GBP 1.2 billion from GBP 1.3 billion in February.

Loans to businesses increased to GBP 7.0 billion from GBP 4.2 billion in February. Within this total, borrowing by large businesses rose to GBP 5.0 billion from GBP 3.7 billion and small and medium-sized businesses borrowed GBP 2 billion compared to a GBP 0.5 billion in February. 05/01/2026 - 08:08:00 (RTTNews)

The U.K. manufacturing activity growth reached a near four-year high in April, driven by improvements in production, orders and employment. The final manufacturing Purchasing Managers' Index (PMI) rose to a 47-month high of 53.7 in April from 51.0 the previous month. The flash score was 53.6 and the index had remained above the neutral 50.0 mark for the sixth month.

Production increased for the sixth time in the last seven months in April. The scaling up of output reflected improved new order intakes, efforts to clear backlogs of work and a minor buildup of finished goods stocks.

New export business advanced for the fourth month but at a slightly weaker extent than in March. Business optimism weakened to the lowest in a year as manufacturers expressed concern about the impact of the war in the Middle East. Supply chain pressures continued to build in April. Average vendor performance deteriorated to the greatest extent in almost four years, linked to ongoing complications caused by the Middle East war and restrictions on transit through the Strait of Hormuz.

Regarding prices, input costs grew at the quickest pace since June 2022. Manufacturers raised their selling prices for the fifth month and at the fastest rate since November 2022. 05/01/2026 - 06:23:00 (RTTNews)