Figures released yesterday showed that the high street did not have a very merry Christmas. UK retailers suffered the worst December for a decade last month, as Brexit worries and a dramatic fall in consumer confidence affected sales. Growth dropped to zero in December for the first time since 2008, with every area of sales hit apart from food. The public unsurprisingly stocked up on food in the run-up to Christmas, but intense competition between the major supermarket chains also helped drive prices down.
This is told in Tesco reporting its best festive sales performance since December 2009. Britain’s biggest retailer posted growth of 2.2% in the six weeks to 5 January, while sales rose by 0.7% in the 13 weeks to 24 November. There was more bad news, as Jaguar Land Rover and Ford confirmed there would be thousands of job cuts, many of which will be in the UK.
Onto politics and Downing Street said that if Theresa May’s Brexit deal is voted down, any debate over a Brexit plan B would be just 90 minutes long and only one amendment would be allowed. If, as expected, the bill does fail, then MPs will be under enormous pressure to decide how to act – they are likely to want to submit many amendments, including a call for a second referendum, or the need for a Norway-plus option of remaining in the single market and customs union. The worry is that 90 minutes is not long enough to resolve what is such a complicated matter and there has been heavy criticism of the government, which appears to be yet another attempt to deny Parliament to decide on the best way forward.
Yesterday, Bloomberg published a fascinating article that takes a look at how deeply Brexit has divided Britain. The piece takes the form of nine charts, which give a sense on how split the country is at present. Worryingly, it doesn’t look as if there will be a coming together anytime soon either.
The last couple of years have been steeped in turmoil and we don’t expect this year to be any different. The eurozone’s growth is clearly tapering off and there are some who believe the same will happen to the US. Without knowing what form Brexit will take, it is difficult to say what will happen to the UK with any certainty, but we will have more of an idea in just over two months.
If you’re making purchases overseas in the coming months, do make sure you consider how you’ll protect your budget against sudden rate changes. A forward contract can lock in your exchange rate, so that, no matter how the markets move, you always know exactly how much you’ll pay. Speak to your Personal Trader on 020 7898 0541 to get one set up today.
Today’s economic data releases will give us more of an idea of how the UK economy fared towards the end of last year, with a raft of releases for November 2018. We will see the balance of trade reading, GDP growth rate and some output figures. A pretty busy end to the week as far as the UK is concerned.