GBPJPY, daily
UK retail sales are much stronger than expected. Sales jumped 1.2% In February, while the January reading was revised up 0.9% from 0.5% I mentioned at the beginning. The February data is the biggest increase in retail spending since October 2022. Strong sales at discount stores and sales at food stores also rose, after a shortage of fresh produce the previous month. Rising food prices are one of the main factors fueling general inflation, with the cost of everyday basics such as eggs, cheese and milk rising sharply. The rate at which prices are rising remains near a 40-year high 10.4% In the year to February – more than five times the BoE’s target.
Excluding auto fuels, retail data was stronger – showing a rise in 1.5% Last month. More evidence that the British economy is doing better than expected and that a recession can be avoided this year, if there is no further setback. The spring budget for the government, which has expanded energy subsidy measures, will help, although higher interest rates will hit those who will have to re-mortgage this year and who will feel the pain. The data justifies the additional rate hike introduced by the Bank of England yesterday but does not change the view of the Bank of England 4.25% The bank rate would have hit the top by now.
Governor of the Bank of England Andrew Bailey He tried to reassure markets and the broader British public that a recession could be avoided, just months after warning that the UK was facing a deep and prolonged (2+ year) slowdown. He warned of the dangers of rising prices, allowing high inflation to continue and harming the “less well-off”. “If all prices try to beat inflation, inflation will go up,” Bailey said. Radio 4 today program. He warned that interest rates would rise again if prices continued to rise.
after best retail sales, UK PMI The reports were weaker than expected. The S&P Global/CIPS Services PMI fell to 52.8 from 53.5while the manufacturing reading fell to 48.0 from 49.3. As in the Eurozone, there is an acceleration in the pace of deflation there and in the UK that has not been offset by an uptick in services sentiment, leaving the Composite at 52.2 – down from 53.1 in the previous month.
Sterling peaked ahead of yesterday’s peaceful rally from the Bank of England, GBP/USD touched 1.2340 But he trades in 1.2200 Now with stock markets falling in the UK and Europe and the US dollar recovering. EURGBP It reached a 9-day high 0.8865 Yesterday and trading at 0.8790 Now and GBPJPY peaked at 161.70 Yesterday but with sentiment significantly weaker today, the pair remained below 159.00.
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Stuart Coyle
Principal market analyst
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