The pound jumped to multi-month highs yesterday against the euro and US dollar following comments from the Bank of England governor, Andrew Bailey, who warned that rates would not be cut “in the foreseeable future.”
Later in the day, sterling fell slightly, but remains steady overall, having gained 0.7% against both the euro and US dollar since this time last Tuesday.
In an interview with Newcastle’s Chronicle Live, the Threadneedle Street governor, said, “I’m very conscious of the position of the less well-off but we do have to get inflation down to 2.0%.”
The Confederation of British Industry’s monthly retail sales gauge improved to -11 in November, from -36 just a month prior. Despite moving towards positive figures, this reading marked the seventh consecutive month with negative sales readings, signalling challenges for retailers.
Speaking of retail activity, Barclays reported that UK payment transactions were down 0.63% year-on-year on ‘Black Friday’ last week. The British bank suggested the dip in sales volume could be down to UK buyers splitting transactions out across November and the impact of the cost-of-living crisis on disposable incomes.
The sale of new single-family homes in the US fell 5.6% to 679,000 in October, much lower than forecasts of 723,000, following 719,000 in September. Economists believe the lower rate is down to the highest mortgage rates seen in two decades weighing on buyers’ affordability.
The price of gold soared to $2,000 per ounce yesterday as economists priced in further rate pauses from the Federal Reserve. This movement extended the yellow gold’s November gains to 1.5%.
This morning, the GfK consumer confidence indicator for Germany edged up slightly to -27.8 heading into December, from a revised -28.1 in November. This was lower than market forecasts of -26 and marks the fourth consecutive month of declines and weak sentiment overall.
This week remains relatively quiet until Thursday when markets will receive inflation rates for key Eurozone economies, France, Italy and the Euro area, which will be followed by key personal spending stats for US buyers in October.
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