The Pound jumped to 1.195 against the Euro on Friday as retail sales figures came in comfortably higher than expectations. British high streets and malls were much busier than they were during the snow hit month of December. The Office of National Statistics reported that the retail sales value had increased by 1.9%, nearly four times higher than the expected 0.5%.
Also adding to the Pounds momentum was early speculation on Friday that another member of the Bank of England’s Monetary Policy Committee has voted to increase the base rate of interest. Since last year Andrew Sentence has been alone in voting to increase interest rates, with a view to calming inflation and easing the UK away from the emergency level of 0.5%. More recently Martin Weale has joined him. There were rumours that Spencer Dale had also joined these two in February’s meeting. We will find this out for definite on Wednesday 23rd February, when the minutes from February’s meeting are published.
Over in America Wednesday’s release of the minutes from the most recent Federal Open Market Committee meeting confirmed that the Fed has a more optimistic outlook for the economy. The minutes also showed concern about the lack of job created the US economy. However no indication was given as to when the Fed may look to tighten monetary policy by increasing interest rates. The US Dollar stayed low against the Euro and the Pound given the lack of change.
