Over the last few weeks some UK reports, like Friday’s manufacturing/industrial output data, have fallen short of the mark.
However, others have wildly exceeded expectations and added to the argument that the UK’s economic recovery continues to gain momentum.
This morning’s British Retail Consortium retail sales report came in the latter camp, showing an annual like-for-like sales increase of 3.9 per cent in January following a 0.4 per cent year-on-year climb in December.
The pace of annual growth in January was the fastest since 2011, with the total amount spent in stores being 5.4 per cent higher than the previous year.
Economists had expected a reading of 0.8 per cent.
BRC director Helen Dickinson issued the following statement with the figures; ‘With a record number of people now in work and the continued recovery in the housing market we have seen very strong performances in furniture and other non-food items.’
After the data was published the Pound achieved a one-week high against the US Dollar and strengthened against several of its other major currency counterparts.
Although Sterling gains were a little limited ahead of the publication of the Bank of England’s inflation report, it was able to edge higher against a fairly static Euro.
London-based industry expert Neil Jones stated; ‘If anything, the economic backdrop in the UK has improved. I’m still upbeat and looking for the Pound higher.’
While the Pound was stronger against peers like the Euro and US Dollar, it was softer against a supported New Zealand Dollar and lost ground against a boosted ‘Aussie’ during Australasian trading.
The Pound’s advance on the US Dollar was aided by the fact that the ‘Greenback’ was under pressure as investors braced themselves for Federal Reserve Chairman Janet Yellen’s address to US lawmakers.
As tomorrow’s BoE inflation report will detail growth and inflation forecasts for the UK, and potentially offer clearer guidance regarding the raising of interest rates, significant Sterling movement can be expected following its publication.
Over the next few days the UK RICS house price balance report may have an impact on the Pound, as could Friday’s UK construction output data.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6406 ,
Pound Sterling,,Euro,1.2001,
Pound Sterling,,Australian Dollar,1.8158,
Pound Sterling,,New Zealand Dollar,1.9749 ,
US Dollar,,Pound Sterling,0.6093,
Euro,,Pound Sterling,0.8330,
Australian Dollar,,Pound Sterling,0.5505,
New Zealand Dollar,,Pound Sterling,0.5063,
[/table]
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