The pound is slightly stronger against the euro and steady against the dollar this morning, however, soft retail sales data and political jitters have restricted further gains.
While retail sales did fall in May, it was by less than expected at -0.5% compared to market predictions of -0.7%. According to the ONS, the main contributor to the fall in sales volumes was food stores, which saw a 1.6% decline.
In the political world, the Conservatives have come under further pressure, losing two by-elections in Devon and West Yorkshire to the Liberal Democrats and Labour. Conservative co-chair Oliver Dowden has resigned as a result.
Yesterday also saw UK business optimism fall to a 2-year low with June manufacturing PMI figures falling to 53.4, down from 54.6 in May. Despite this, services PMI came in better than expected, unchanged at 53.4.
Notably, UK PMI outshone eurozone PMI, which showed a similar trend to the UK figures in May, suggesting that the eurozone’s slowdown is about a month behind that of the UK.
