It’s not all doom and gloom for the British consumer. Retail sales are up by 0.3% m/m, on top of a small upwards revision. Year over year, sales are down 0.3%, a bit better than -0.6% predicted. Excluding fuel, the volume is up by 0.1% and down 0.3%, all the figures are a bit above expectations.
GBP/USD is ticking up in range, but not going anywhere fast. It is important to that the pound is vulnerable to the political turmoil, internal and external.
The United Kingdom was expected to report a small rise of 0.1% in retail sales in October after a fall of 0.8% in September (before revisions). Year over year, a drop of 0.6% was expected after 2.3% beforehand. Excluding fuel, a fall of 0.4% was projected m/m and 0% y/y.
Reports from the BRC, Visa, and Barclays all pointed to a slowdown in consumer spending, so perhaps real expectations were even lower.
GBP/USD was trading around 1.3160 ahead of the publication, marginally lower on the day but nothing earth-shattering. All in all, cable sticks to the 1.3030 to 1.3320 range.
We already had a few major releases in the UK this week. Inflation remained unchanged at 3%, falling short of expectations for a rise. The jobs report was positive, with wages increasing by 2.2%, a beat on estimations, but the lack of a meaningful reaction exposed Sterling’s weakness.
Brexit remains in the limelight. Fresh reports suggest that UK PM Theresa May is leaning towards offering a bigger “divorce bill” towards the EU. That should be helpful for the pound as talks have been stuck so far. The PM also faces her own rebellion from some 40 Tories. The pound has quite a few issues.
