GBP – Consumer Spending Lackluster

The Sterling was taken lower on Monday on the back of a disappointing round of data. The BRCS Retail Sales Monitor produced a weaker reading than the previous month with a gain of only 0.5% compared to the previous mark of 1.2%. Also the RICS Home Price Balance showed a decline of -8%, below the expected gain of 5%. The data basically reminded investors that the U.K. economy is far from out of the woods and that it may face difficult circumstances ahead. Trade Balance numbers will be published today along with the CB Leading Index. Tomorrow the Bank of England will be thrown into the fray with its Inflation Report and testimony from BoE members. The GBP has done well the past couple of months and had many days of positive movement, yesterday’s results however are a clear reminder that questions persists about the U.K. economy and that a storm could be developing on the horizon.

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