British shops were bustling again in February, with monthly sales increasing by an unexpectedly strong 1% (after their previous blistering growth of 1.7% in January). Shoppers seemed intent on organising a bit of spring DIY, with hardware and household goods recording the strongest sales growth.
As of this morning, sterling had strengthened by around half a cent against the euro and the US dollar since Monday. This morning’s action rounds out a busy week for the pound in terms of data, but the naval gazing will continue long into spring after the chancellor’s £14bn economic “repair job” this week.
After a spring statement that essentially amounted to an accounting rejig, nobody is under any illusions as to the state of British public finances. There simply isn’t much money left to spare at the moment, leading some (including the economic thinktank the Institute for Fiscal Studies) to warn that future tax rises may be necessary to balance the books.
This morning, we learned that the German Gfk consumer confidence survey (a useful indicator of future economic growth) slightly underperformed expectations this month. Staying in Europe, headline consumer price inflation in France stayed at an annualised 0.8% in March, below expectations.
Just three months into the new Trump presidency and talk of a “trade war” is already starting to get a little tiresome. The latest concerns were sparked by the president’s comments on Wednesday evening, when he announced a 25% tariff on all cars not manufactured in the USA. British and European giants like Aston Martin and Volkswagen duly endured a tough day on the stock market on Thursday.
The big loser would turn out to be the US dollar, though. Despite recording slightly stronger economic growth than expected in the final three months of 2024, the US dollar recorded daily losses against its European adversaries.
For any holidaymakers wondering how all drama this is impacting travel bookings, new data from Canada showed a staggering 70% drop in flight bookings between the two nations. Travel providers in Europe are reporting that bookings are drastically down to the United States, although we’ll wait for less anecdotal evidence to pass judgement on that.
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