UK retail sales fell 0.3% m/m and rose only 5.4% y/y. And it’s not only the prices at the pump: retail sales ex-fuel dropped 0.7% and rose only 4.8% y/y, all below predictions. Did the UK economy experience a “hangover” in January after a strong holiday season?
GBP/USD remains on low ground. Were the numbers leaked?
The United Kingdom was predicted to report a small month over month slide 0.1% in January after a rise of 0.4% in December. Year over yar, a rise of 5.9% was expected. Excluding fuel, a slide of 0.1% was predicted m/m and a rise of 5.9% was on the cards – very similar numbers.
GBP/USD was trading lower at 1.5365 before the publication. However, the pound reached new highs against the euro.
Here is the preview: trading the UK retail sales with GBP/USD.
At the same time, Public Sector Net Borrowing was predicted to show -9.5 billion – a surplus in government financing during the month of January. The actual number is -9.405 billion, marginally better than expected. This may be good news for the current government before the elections, but does not have much impact on the pound.
The pound has enjoyed quite a lot of strength lately: the positive PMIs, lower unemployment and the bullishness from Mark Carney and his colleagues regarding inflation all helped the pound stand out, including against the greenback.
The fall in oil prices is not affecting core inflation so far.
Here is the GBP/USD chart:
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