The Usual Suspects

15 May, 2019

Samuel Roberts

Once again, uncertainty seems to be the state of play.

We seeTheresa May being urged by her party  colleagues to abandon her talks with Labour (the same party colleagues who want her to resign), Nigel Farage having an impressive showing for the upcoming European elections (elections we should not even be taking part in)and promising to bring back a ‘no holds barred’ form of Brexit as initially promised, the Tories ‘flexing’ to get ready for a new leadership election and the strong possibility of a general election or (let me whisper it) another peoples vote.  Things truly are no better or clearer than they were months, if not years ago.

Politics and the political ‘gesturing’  (or should that be jestering) that comes along with it, can have a very severe impact on the economy and the market rates.

Desperate for some confidence to be shown elsewhere, we look to the upcoming market data releases.

This morning, we have the Consumer Core Prices Index.

This is currently trending around the 106 -107 points mark.

This index does not include main stayers such as alcohol, tobacco or fuel but is useful as food and energy prices can be very volatile and this can be a more unbiased, more stable measure of inflation and its impact.

Public Sector Net Borrowing

Initially the UK government posted a total net borrowing figure of GBP 0.84 billion to March 2019.  In March last year, it was £0.69 billion.

The forcast for later on today is expected to be around £0.34 billion.  Since the start of the financial year in April, borrowing totalled £24.7 billion, down by £17.2 billion on the previous financial year.  These are the lowest UK net borrowing figures for seventeen (17) years.

Retail Price Index (month on month)

The retail price index fell to 2.4%, easing from 2.5% in March.  on a monthly basis these figures are considered flat.

Compare these to the all time high of 26.9% in August 1975 (at the time a fresh member of the EEC) and an all time low of -1.6% June 2009 (still coming to terms with the market Crash the year before).

PPI (Producer Price Index) Figures

These figures are a key indicator to the factory goods produced by the UK.  At a time when the U.S (mainly President Trump) are fixing to start a trade war with China and closer to home, Germany are considered to be struggling with their manufacuring figures, it is interesting to see just how productive, the UK manufacturing sector has been.

Previously, the UK showed a 0.2% gain which was a strong showing, so the market is keen to see if UK manufacturing can continue to show strong results.

There are many influences that affect the currency markets.  Even with positive outlook figures expected from this mornings’ data releases, the fact remains that the UK Governments ‘handling’ of Brexit and their current tentative grip on leadership are having the biggest influence.  If you have a need to exchange and transfer currencies or are considering doing so, for whatever reason, it is prudent to get in touch with your Currency Consultant at Currency Index.  We are knowledgeable, professional and here to help you get the best result at all times.