By Grace Smyth
Ending the week with some positive data first thing this morning with UK Retail sales – April’s figure saw a welcome jump to 1.2% month-on-month from 0.1% in March, easily beating expectations, and taking the year-on-year change from 2.6%, beating the 4.5% expectation and posting an impressive 5.0%. All the glorious sunshine across the month of April, along with the Easter break had encouraged consumers to head out and spend, particularly at food retailers. Overall, a positive outlook ahead, as this month’s figure takes the UK to its fourth consecutive month of sales growth.
Yesterday we saw better-than-expected PMI readings, particularly in the Services sector. PMI data is worth noting as it is a leading indicator for business activity and can help analysts decipher trends in GDP, employment and inflation. The good results here support the theory that the Bank of England may hold off cutting interest rates further this year. Markets had originally thought the bank would cut rates twice this year, but if we continue to see this kind of result they may choose to hold interest rates which could see demand for Sterling increase. Time will tell.
GBP-EUR exchange rates now have held nicely this week and this morning we have seen it test its current resistance level, while the GBP-USD exchange rate also shows a small uplift.
The rest of the day is pretty lowkey in terms of data releases with the main one to note coming in at midday as Canada post their Retail Sales figure.
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