Sterling consolidated its position at the end of last week, close to 15 month highs against the euro and five year highs against the US dollar as we headed into the Easter holiday. Following a week in which unemployment dropped below 7%, the minutes of the April Bank of England (BoE) meeting released tomorrow gain even more importance and will be closely scrutinized for the latest thoughts of its members as to when interest rates could be increased. The 7% unemployment rate was originally the threshold that the BoE had set for increasing interest rates, and although this guidance now encapsulates a broader range of indicators the unemployment rate still remains a key component.
Elsewise there is little data out of the UK until Friday when retail sales for March are announced. Given that Easter last year was in March and this year in April, expectations are for a fall in the monthly comparison but for the twelve month period a slight increase is expected. Any growth in this data would indicate that consumer confidence is high.
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