A lively week in the currency markets ends with sterling currently some 1% stronger than the start of the week against both the euro and US dollar. It was more, but two disappointing data sets this morning have slightly taken the shine off sterling.
While some large financial institutions now say they are looking more positively at sterling, you can see the overall picture in our new Quarterly Forecast, free to download here.
This morning’s disappointing data started with GfK Consumer Confidence overnight, which fell to -45. This was close to September’s record low and reversed three months of improvements.
Also on the high street, we’ve just seen a reading for UK retail sales for December, showing a decline of 1%, a steeper fall that last month’s -0.4%. This had been expected to rise sharply, given positive results from some retail chains. However, it was in line with the USA’s 1.1% fall, announced on Wednesday.
That’s it for high-level data this week.
In economic news, the Chancellor Jeremy Hunt has surprised no-one when saying yesterday that there would be no big tax giveaways in the Budget scheduled for 15 March. They will be kept for the following, election year, analysts suggest.
The Labour Party team of Sir Keir Starmer and shadow chancellor Rachel Reeves have been speaking to business leaders at Davos this week.
In the US there are rising fears of another debt-ceiling crisis approaching this year, but hopes on inflation rapidly declining, according to Lael Brainard, the vice chair of the Federal Reserve, in a speech yesterday. There will now be little information coming out of the FOMC ahead of the interest rate decision on 1 February.
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