As Britain gets back to work after the New Year break, productivity looks set to increase.
But the first week in January will see several economic reports released which could affect British currency.
Whether these effects will be positive or negative remains to be seen, and will depend on what exactly each report brings.
Speaking about the pound in the first week of 2018, Laura Parsons, Torfx currency analyst, said: “Pound movement was limited as 2017 came to a close, but with markets reopening after the New Year break and a few high profile economic reports due for release, we might see some GBP volatility over the next few days.
“As it stands, GBP/EUR is trading in the region of €1.124, but the pairing could climb this morning if the UK’s manufacturing PMI impresses.
“Conversely, a decline in manufacturing output would be pound-negative.”
News from Europe could also have a bearing on the performance of sterling this week.
Laura explained: “Manufacturing PMIs for the Eurozone will also be of interest.”
The pound finished 2017 on a low note, with the slump possibly explained by the influence of Brexit negotiations earlier in the month, which saw Prime Minister Theresa May defeated in a parliament vote.
The vote fell in favour of MPs being able to debate Brexit terms before the deal was voted in by parliament, rather than a yes/no vote.
The Prime Minister was defeated by 309 to 305, in a parliamentary vote led by Dominic Grieve, the former Tory Attorney General.
Consumer groups also revealed consumers staying away from the shops and spending less.
Last week it was announced shopper figures on Boxing Day dropped 5.2 per cent compared to the same time last year, according to research group Springboard.
Furthermore, UK consumer confidence fell to -13 for December, which is its lowest figure in four years.
This figure is likely linked to a lack of progress in Brexit negotiations – which tends to have a negative effect on the UK currency when progress slows.