UK economy crisis: How to trade UK assets in 2025?

Financial journalist Paul Reid breaks down how traders can navigate the ongoing UK economy crisis in 2025. From GBP to gold, discover actionable strategies to trade UK assets during turbulent times.

It’s 2025, and you’re following the UK’s financial landscape, trying to decide whether to buy or sell. You’re not the only trader struggling to forecast GBP and other UK assets. The UK economy crisis looks unsolvable, and yet financial media paints a different picture.

So, how can you navigate it all and make smart GBP trading decisions over the next few weeks and months? Let’s take a step back and break down what’s happening in the UK, look at the assets that matter most to traders, and focus on simple ways to find opportunities in the markets.

Key takeaways

1. Watch for GBP in the 1.25–1.30 range. If it dips below 1.25, research a buy order. If it breaks above 1.30, look for selling opportunities.
2. If UKOIL prices dip below 60 USD, consider researching a buy order off the rebound. A break above 70 USD signals stronger potential, but not a reversal point.
3. Watch for global risk or economic uncertainty. Consider riding an upward trend on XAGGBP and XAUGBP to follow haven fallback investing.

Overview of the UK economy crisis

In 2025, the UK economy is dealing with mixed signals. On one hand, inflation is stubbornly high, remaining above the Bank of England’s (BoE) target, and growth is slow. On the other hand, the government has promised some changes to fix the economy, but they won’t see results overnight. Officially, the outlook is unclear, and traders are feeling the pressure.

However, 2025 still holds the potential for market moves that could create significant opportunities for traders, but you'll have to remain vigilant every day. 

One of the most important assets to watch right now is the not-so-Great British Pound. A few years ago, when the pound was under pressure, many traders forecasted a drop. It seemed obvious that a downtrend was forming, much like today.

Early traders saw impressive results by shorting the pound, but that’s where things got interesting. When the pound unexpectedly bounced back, those traders had to close orders fast and quickly switch to a buy order. That’s the nature of currencies. Long boring stagnation followed by seemingly unpredictable volatility.

What to watch and wait for in 2025

Monitor GBP’s support and resistance levels. If GBPUSD drops to 1.25, there could be opportunities to buy the bounce. If it climbs above 1.30, traders might see this as a new and positive (bullish) trend forming and go long (buy) on the pound, but always be cautious of any unexpected news from the Bank of England (BoE).

EURGBP: Euro vs pound

Another key pair to monitor is EURGBP. As the euro has been gaining strength compared to the pound, this pair could be a good one to trade. With the pound’s weak economic outlook, it’s likely that EURGBP could climb.

Think back to the 2016 Brexit vote. After the result, the pound dropped drastically against the euro. Banks and investors fled the UK in droves, and a meltdown seemed inevitable. For the most part, anyone shorting GBP that year celebrated the UK leaving the EU even more than the Brits.

Fast forward to today, and although the pound has bounced back a bit, investor sentiment is at an all-time low, which is reflected in the daily news. The Eurozone’s economy is stronger, and with the European Central Bank (ECB) holding its ground so far, the euro might remain the stronger currency for the next few months.

If EURGBP stays above the 0.85 level during this difficult time, it could easily rise at the slightest positive announcement, making it a good idea to research EURGBP buy orders at the first sign of a GBP slip, especially if there’s any sign of pound weakness trending in the news. Market sentiment is quick to react, so be ready.

Watch out for the BoE's rate decisions as well because they are the only fundamental source capable of enticing bond purchasing and moving the pound out of the current negative sentiment.

Brent Crude: What’s happening with UK oil?

Next, let’s talk about UKOIL—or Brent Crude oil. Oil prices have always been unpredictable, and right now, with global demand slowing down, oil is facing new and complicated pressures. But here’s where traders can step in: when oil drops to key levels, like 60 USD a barrel, that’s an excellent opportunity to consider emerging buying options.

A couple of years ago, when oil prices crashed, many traders saw it as a buying opportunity and jumped in. They assumed that oil prices would rebound, and they were right. Now, while oil isn’t crashing, prices are still relatively low. The key here is understanding that if Brent Crude shows signs of a recovery, like a rise back above 70 USD, traders who bought at lower levels could see desirable results.

Watch for news around global supply issues, such as OPEC decisions or geopolitical conflict. If those come up, it could trigger a rally in Brent Crude prices, so be ready to take advantage by reviewing the charts daily.

XAGGBP & XAUGBP: Escaping the UK economy crisis

Now, let’s talk about precious metals—silver (XAGGBP) and gold (XAUGBP). In times of economic uncertainty, traders often flock to gold and silver as safe-haven assets. With the pound under pressure, XAGGBP and XAUGBP could continue to rise. In fact, gold has been gaining steadily for some time now, and it could go even higher if global risks pick up.

When the pandemic hit in 2020, gold prices surged. Those who had positioned themselves to buy gold saw massive returns. While gold probably won’t surge like it did in 2020, it’s still a good option if the global economy faces more uncertainty. Silver follows gold’s lead, so if gold is moving up, silver will likely follow.

Watch for signs of additional geopolitical tension or global economic slowdowns, as these will push big investors towards safe-haven assets like gold. Follow the big money on this one.

UK100: The UK’s stock index

Finally, let’s look at indices and the UK100, which tracks the top 100 companies on the London Stock Exchange. This index is a good way to gain exposure to the overall UK market, but here’s the catch: it’s heavily weighted towards energy, financials, and consumer goods. With inflation still higher than expected, certain stocks in these sectors could be shaky. Remember, companies are leaving the UK and turning to US indices, and like rats leaving a sinking ship, others will follow eventually. And since the UK100 is very light in the technology sectors, low returns, and a declining industry mean only one thing.

Final thoughts

The UK economy crisis is, in my opinion, about to get worse. The country is struggling economically, politically, and domestically. Brits remain divided, and a growing loss of faith in the current government is further complicating matters. National resources are already limited and continue to weaken, and big companies are avoiding or leaving the UK. The nation is suffering from the highest national debt in history, inflation persists, and taxes are rising. 

Except for a recent trade deal with India, there’s been little to fuel bullish market sentiment. Moreover, there doesn’t seem to be an economic plan in place to rejuvenate UK assets other than a long-term fairytale about becoming a tech hub for Europe.

If GBP and the UK100 somehow manage to move upwards in 2025, I’ll be more surprised than anyone. And if they do, I doubt the rally will last—so make sure your account is fully activated and funded, and keep a close eye on the GBP chart.

On a final note, certain political opponents are gaining traction and stirring the UK people. While this might trigger positive sentiment among the British public, the party involved has little to no economic plans at the ready that could reverse the economic devolution happening right now. Don’t be fooled by the news hype coming from any party.