It was no surprise that sterling (GBP, pound) lost ground against the US dollar (USD) after Monday’s atrocities. Due to the additional uncertainty it has thrown into the political mix with regards to the European election and the potential impact it could have on Article 50 negotiations, there was a “risk off” sentiment in the market. Sterling lost ground against the single currency (EUR) as well.
Meanwhile, data was actually encouraging following the release of upbeat realised sales numbers by the Confederation of British Industry. The sales monitor measures retail sales volumes, which surged to 35 points in December, well above the forecast of 20 points. The rise was at the fastest pace since September 2015. Clothing saw particularly strong growth in sales volumes, due in part to the cold snap we experienced. However, sales are expected to slow next year as inflation is passed down the chain, with many retailers delaying price increases until the new year.
Today the UK’s public sector borrowing number is due to be released.