Another day of bad news for the UK economy: retail sales fall sharply by 1.3%, much worse than expected and on top of a downwards revision to a drop of 0.4% in March. Core sales followed suit with -1.6% and also here, the previous figure was revised down. It doesn’t look better on the year over year figures: a rise of only 2.7% y/y and core sales are only 1.8% higher – both y/y figures are around half the early expectations. Was there an Easter effect?
GBP/USD was anticipating the publication with a drop and dips its feet just under 1.43 on the publication.
The UK was expected to report (see full preview here) a drop of 0.1% in retail sales for March, following a slide of 0.4% seen in February (before revisions). Core sales were expected to drop by 0.4%. Year over year, a rise of 4.4% was predicted in the headline figure and 3.7% in the core one.
GBP/USD was trading at somewhat lower ground in comparison to previous days and falling to 1.4315 before the publication. Markets were doing their front running.
BOE Governor Mark Carney testified in parliament earlier this week and made clear warnings about the danger of a British exit from the European Union, the so called Brexit. This curbed the gains of the pound,
The disappointing jobs report from the UK is partially attributed to the fears of a Brexit: lower investment due to uncertainty is cited as weighing on the economy and already taking its toll on jobs and wages.
Share
