Last week sterling was slightly weaker as UK retail sales disappointed on Friday, which followed weaker than expected average earning figures earlier on in the week. This could be an indication of the difficulties the economy may be facing later in the year as the UK proceeds on its Brexit path.
UK retail sales dipped for a second consecutive month, posting a negative reading of 0.3%, down from 1% the previous month. Consumer spending makes up a large proportion of the UK economy and therefore, the first quarter 2017 Gross Domestic Product (GDP) figure may come out lower than expected.
The latest on Brexit is that former Prime Minister Tony Blair has declared it his ‘mission’ to persuade Britons to ‘rise up’ and say that they voted in the referendum ‘without knowledge of the true terms of Brexit,’ which has become more and more apparent over the past few months.
This week is light on key data. The Public Sector Borrowing requirement is released tomorrow and will be positive given the high level of tax receipts in January. It is the level of these tax receipt will be closely scrutinized. On Wednesday we have the second estimate of the final quarter 2016 GDP figures, no change is expected form the first reading. Otherwise it will be the political landscape which is most likely to affect sterling.