Sterling Falls Again
20 July, 2018
Yesterday we saw the value of sterling drop further as the latest retail sales figures came out woefully under forecasts. The yearly figure was expected to be 3.9 percent but came in a whole percent lower, while the monthly figure for June was expected to be 0.4 percent but actually ready -0.5 percent. This was being blamed on the World Cup and the prolonged hot weather we are experiencing here. Whilst food and drink sales did well, the hot weather and football kept people away from the high streets.
The lower than expected figures, whilst explainable, cast further doubt over the chances the Bank of England would consider raising interest rates when they meet on the 2nd August as has been speculated previously. Wednesday’s inflation figures also cast a shadow over those chances with a surprise fall in the headline rate, so for the second day in a row, the pound got pummelled as investors priced out the rate rise and sold off their sterling investments. Sterling dropped half a cent against the single currency and ¾ of a cent against the US dollar, yet again testing fresh lows against both as the pound’s slump continues.
Sterling won’t be help from the political turmoil either, as concerns are rife as to whether Theresa May will be ousted as PM. Yesterday Philip Davies confirmed he had submitted a letter of no confidence to the 1922 committee, leaving the question as to how many other MP’s have also submitted letters, as they do so confidentially normally. There needs to be a total of 48 letters to trigger the no-confidence vote, so time will tell whether Theresa Mays reign will come to an end.
Today we have public sector borrowing figures and the NIESR GDP estimate for the UK, while after lunch Canadian retail sales and inflation figures get released at 1.30pm. With the pound in freefall and an upcoming transfer to make, it would be prudent to contact one of the team today for some friendly guidance and to discuss your options.
- 2020 (59)
- 2019 (190)
- 2018 (229)
- 2017 (253)
- 2016 (254)
- 2015 (253)
- 2014 (252)
- 2013 (287)
- 2012 (270)
- 2011 (576)
- Brexit deal to be done, or going, going, gone? 25 November, 2020
- Sterling starts the week down from the highs of last week 16 November, 2020
- Votes are in – albeit still being counted, will Donald trump Joe? 4 November, 2020
- No categories