The day began badly for sterling yesterday with the news that UK car sales fell by 9.3% in September. It is the sixth consecutive month that sales have declined and is the first decline in September for six years. In addition, diesel car sales fell by more than 20% in September, as the British public look to the recent emissions scandal that has engulfed the industry.
By that point sterling had already weakened against the US dollar on the back of Theresa May’s speech. There is increased speculation that MPs will oust her from her position which has naturally led to some unease in the City. Before long, the pound had sank to a four-week low against the greenback and, with a raft of positive economic data coming from over the pond, the UK needs to pick itself up and dust itself down sooner rather than later; sterling has now lost all of the gains it made following Bank of England Governor Mark Carney’s comments regarding the possibility of a UK interest rate rise.
The weak data heaps pressure on Chancellor Philip Hammond, who needs to deliver a budget next month that boosts the Tory’s popularity. However, that may prove difficult given yesterday’s figures and growing evidence that the UK economy is slowing. Tomorrow is fairly quiet for the UK, although Halifax will publish their monthly and annual house price index.