Czech Republic question EU pact

15 December, 2011


Exchange rates have continued to bounce around today after UK retail sales showed a fall in November, and the EU stability deal agreed on Friday was thrown into further doubt by Hungary and the Czech Republic. UK retail sales fell 0.4% in November, despite heavy retail discounts, although the September and October figures were revised upwards giving overall growth of 0.7% over the 3 month period and 0.4% for the year. Analysts were expecting similar figures, so the Pound was not put under too much pressure. Later on today, the Czech and Hungarian prime ministers announced that they would not give tax control to the EU, as had been proposed at Friday’s summit. The Eurozone can go ahead regardless, but markets already nervous about Euro stability are yet to be reassured that a solution has been found. Consequently we are still seeing Euro weakness with the best rates for sending Euro payments since February. Tomorrow we have Eurozone trade figures out at 10am and US inflation at 1.30pm.