industry

Pound euro exchange rate: GBP muted as UK retail sales contract faster than expected


According to data published by the Office for National Statistics (ONS), UK retail sales growth contracted 0.8 per cent last month, down from an upwardly revised 0.4 per cent growth in August.

This fall in sales growth was notably larger than the 0.4 per cent contraction that had been forecast by economists, and appeared mostly driven by a sharp fall in food sales.

However despite September’s disappointing figures, the ONS remained upbeat as it spoke of a sizable lift in sales over the summer period.

Rhian Murphy, head of retail sales at the ONS said: “Retail continued to grow in the three months to September with jewellery shops and online stores seeing particularly strong sales.

“This was despite a stark slowdown in food sales in September, following a bumper summer.”

Meanwhile the euro also remains under pressure this morning as Italy’s ongoing budget drama continues to drag on sentiment.

Italian Prime Minister Giuseppe Conte has said that there would be ‘no room for change’ with Italy’s draft budget, despite it defying EU rules.

This puts Rome on a collision course with Brussels and is likely to see Mr Conte face considerable criticism from his peers at this week’s EU summit, with a rift in the EU unlikely to reflect well on the single currency.

Looking ahead, the official start to the latest EU summit is also likely to see Brexit return to the spotlight over the next couple of days.

At a dinner yesterday EU leaders decided against calling a special summit in November to draft the UK’s withdrawal deal, declaring that insufficient progress had been made in talks.

While EU leaders agreed to continue with negotiations, the ball now looks to be very much in Theresa May’s court, something which will not exactly fill pound investors with confidence given the pressures she faces from her own MPs.

That’s not to say the euro will emerge unscathed either as the growing uncertainty of Brexit increasingly begins to drag on the single currency.



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