020 7898 0500This week we have seen economic data that was slightly disappointing on the whole. The two big figures in the form of inflation and average earnings both failed to hit expectations. What was highlighted was that the rates of inflation and wage growth are now converging. If this trend continues over the next few months, household incomes will be squeezed, having a negative effect on consumer spending. We must take into consideration that consumer spending is a significant part of the UK economy.
The only really significant news flow for the day was that Swiss investment bank UBS has decided to maintain its forecast for GBP/EUR to hit parity by the end of 2017. Despite the resilience of the UK economy, UBS are basing their forecast on an interruption of a “Hard” Brexit undermining that resilience.
Looking at the calendar today we have the release from the UK of retail sales on Friday. This is expected to reverse some of the negative reading that we saw last month.
