Today’s Exchange Rate Report
As of 11:00 a.m. on 19 January 2026, the real-time market exchange rate of the British pound against the Chinese yuan stood at 1 : 9.3275. The pound has come under pressure mainly due to volatility in global equity markets, with capital flowing toward perceived safe-haven assets such as the US dollar and precious metals. At the same time, the narrowing interest rate differential between the UK and the United States, as well as China, has also weakened the pound’s relative appeal.
Key Events This Week
UK abandons mandatory rollout of Digital ID
UK property market rebounds following the Budget
Former Chancellor Nadhim Zahawi defects to right-wing party
UK introduces £1 billion annual emergency support fund
Prince Harry returns to the UK for court proceedings
01 UK Abandons Mandatory Digital ID Rollout
On 14 January, the UK government announced that it would abandon plans to mandate the use of a Digital ID for all workers as proof of their legal right to work. Instead, multiple forms of identity verification will be allowed to coexist, and the overall rollout of the system will be delayed, marking a significant adjustment to the controversial Digital ID policy.
The proposal was first put forward by Prime Minister Keir Starmer in September 2025, with the aim of establishing a compliant digital identity system over the coming years to replace fragmented paper-based documentation. The initiative was intended to curb illegal employment, improve the digital efficiency of public services, and strengthen border controls.
Under the original plan, Digital ID was set to become a mandatory tool for employers to verify whether job applicants had the legal right to work in the UK. However, the proposal quickly sparked widespread public and political opposition following its announcement.
According to official statements, this key mandatory requirement has now been withdrawn. Job seekers will continue to be able to use existing documents such as electronic passports and digital visas to prove their right to work, without being required to register for or present a government-issued Digital ID.
02 UK Property Market Rebounds After the Budget
In January 2026, the UK property market saw notable changes following the release of the new annual Budget. Data from leading market authorities show that average UK house prices rose by approximately 2.8% month-on-month, reaching around £368,000—representing a relatively rare rebound for this period.
At the same time, figures indicate that overall rental levels in the UK declined by around 0.7% in 2025, marking the first annual drop in rents since 2011.
Experts suggest this trend is partly due to more young people choosing to buy homes, or extending the period of living with their parents amid market uncertainty, thereby reducing demand for rental housing. In addition, as interest rates stabilised, the Bank of England’s decision in December 2025 to cut the base rate to 3.75% encouraged some potential buyers to enter the market earlier than planned.
Property analysts caution that despite the recent rise in prices, sellers should maintain realistic pricing expectations. Housing supply is currently at a 12-year high, giving buyers more choice and potentially limiting further price growth. London, as one of the UK’s largest property markets, continues to influence national trends, though its rental and price movements remain subject to changes in supply and demand, economic expectations, and the broader policy environment.
03 Former Chancellor Nadhim Zahawi Defects to Right-Wing Party
On 12 January, former UK Chancellor of the Exchequer Nadhim Zahawi, previously a member of the Conservative Party, announced that he had joined the right-wing Reform UK party, becoming the latest senior former Conservative figure to defect.
Zahawi has held a number of senior positions under several prime ministers, including Boris Johnson. His roles have included serving as Secretary of State responsible for the COVID-19 vaccine rollout, a brief tenure as Chancellor, and Chairman of the Conservative Party.
Speaking at a press conference, Zahawi said the UK is facing a range of deep-rooted challenges, including weak economic growth, mounting social issues, and uncertainty about the country’s future direction. Describing the situation as a “crossroads” moment for Britain, he argued that political realignment is necessary. Zahawi said he believes the policies advocated by Reform UK and its leader, Nigel Farage, are better aligned with public expectations.
Analysts note that although Zahawi is not currently a sitting Member of Parliament, his defection may carry symbolic significance for Reform UK and could further intensify political competition outside the UK’s two traditional major parties.
04 UK Introduces £1 Billion Annual Emergency Support Fund
In recent days, UK authorities unveiled a new social support initiative, proposing the introduction of a “Crisis and Resilience Fund” worth approximately £1 billion per year from April 2026. The fund is designed to help low-income households cope with sudden financial hardship and is expected to run for at least three years.
According to official guidance documents, the fund aims to provide local authorities with stable financial resources, enabling them to offer more flexible cash assistance to residents facing unexpected crises.
Unlike previous schemes that relied primarily on in-kind support, vouchers, or food aid, local authorities will be able to distribute direct cash payments to households experiencing financial difficulty, helping to ease pressure caused by unemployment or unforeseen expenses.
The funding will also include housing-related support, such as assistance with short-term rent shortfalls or measures to prevent rent arrears resulting from sudden financial shocks. In addition, part of the budget may be used to support initiatives that strengthen long-term financial resilience at both individual and community levels.
Officials emphasised that the fund is intended not only to address immediate crises, but also to help households build the capacity to withstand future economic shocks.
05 Prince Harry Returns to the UK for Court Proceedings
On 16 January, UK media reported that Prince Harry had formally returned to London this week to attend a private legal case at the High Court in which he is involved.
According to the court timetable, Prince Harry is expected to give testimony and may appear in court multiple times over the course of the proceedings, which are scheduled to last up to nine weeks. The case also involves several other high-profile claimants, including musician Sir Elton John, actress Elizabeth Hurley, and other public figures.
The lawsuit is widely seen as a continuation of Prince Harry’s long-running legal battle with sections of the British press over privacy issues. He has previously won similar cases, receiving compensation and formal apologies. This latest hearing has once again brought the debate between traditional tabloid practices and the protection of privacy rights into the public spotlight.
Notably, Prince Harry’s visit to the UK does not include any planned engagements with senior members of the Royal Family. Reports indicate that during his court appearances, King Charles III, Prince William, and Catherine, Princess of Wales, are all away from London on official duties, reflecting the ongoing complexity of internal royal relationships.
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