020 7898 0500Sterling slid across the board on Friday as the UK posted its weakest retail sales number in seven years.
UK retail sales fell by -1.8%, much worse than the expected -0.3%. This represented the biggest quarterly fall since 2010, as inflation hindered confidence.
The pound had been on a positive run after the snap election was called by May. However, with rising inflation and retail sales showing a prolonged decline, there will be some concern that a mild form of stagflation could emerge.
The news over the coming weeks will likely be dominated by the political party campaigns and whether the public will be voting for a hard or soft Brexit. In the meantime, the big figure of the week will be the first release of the UK’s first quarter Gross Domestic Product number. It is expected to show that the UK grew by 0.4% quarter by quarter and 2.2% year on year, but Friday’s poor retail sales may put this in doubt, as consumer spending makes up close to 70% of GDP.
