China Bizwatch

Breaking News, National and World News

Pound euro exchange rate: GBP/EUR improves as UK retail sales beat forecasts

2 min read

The increase in inflation was slightly stronger than forecast, with the yearly figures rising 1.3 percent, while month-on-month figures also improved 0.2 percent, but investors are still expecting the ECB to take policy action. Marion Amoit, an Economist at S&P Global Ratings, also warned: “The global [economic] slowdown [could] exacerbate the persistent weak inflationary pressures, which could cause inflation expectations and the ECB’s target to diverge further.”

Yesterday also saw the UK’s year-on-year inflation data for June, which remained on target at 2 percent for the second month in a row. 

Victoria Clarke, an economist at Investec, offered reasons for hope, however, saying: “For the Bank of England the close-to-target inflation readings help the institution to maintain its wait and see position amidst continuing questions over Brexit’s likely course.”

“We maintain our view that the BoE is happy sitting tight throughout this year and through much of next year too.”

The pound also gained ground following the release of the UK retail sales figures for June this morning. 

Month-on-month figures beat the forecast -0.3 percent and rose by 1 percent. Year-on-year figures also rose above consensus to 3.8 percent.

Rhian Murphy, a statistician at the Office of National Statistics, said: “Retail as a whole saw a return to growth in the month of June, mainly due to growth in non-food stores, with increased sales in second-hand goods, including charity shops and antiques.”

As these follow on from stable inflation, rising wages and the lowest unemployment since 1975, Sterling traders have become more optimistic about the UK economy, thus providing some uplift for the pound today.

Later on today, however, will see the second ballot in the House of Commons on whether the next Prime Minister could suspend Parliament in order to push forward a no-deal Brexit. 

If the odds of a no-deal Brexit are viewed as declining, GBP exchange rates could benefit.

Let’s block ads! (Why?)

Copyright © 2022 China Bizwatch. All Rights Reserved