Britons' worries about inflation grew this month, though their view of their future finances was less pessimistic, Markit survey showed today. With the cost of living expectations rising sharply since August, households appear to have become more concerned about the inflation outlook. Britons have cut back on spending as high inflation, tax increases and slow wage rises have put the tightest squeeze on incomes for more than 30 years, keeping consumer morale low. The Bank of England and the government are hoping that lower inflation will ease the pressure and enable households to spend more.
This week will see another clutch of euro zone events. Spain, under pressure to submit to a rescue programme, will present its 2013 budget on Thursday, while Greece is also due to resume talks with the EU/IMF/ECB troika of lenders.
Investors refocused attention from euro zone’s central bank stimulus schemes to weak economic fundamentals and the yet-to-be-resolved debt crisis. September’s German IFO series missed expectations and came in lower than the previous month’s prints in all of its components. Sentiment in the manufacturing sector fell particularly sharply, perhaps reflecting the effects of weakening demand from the rest of the euro-zone and elsewhere. The fall in the German IFO business survey is a reminder that even the EZ’s strongest economies are suffering from a serious economic downturn.
Moreover there seem to be emerging signs of discord between French and German leaders on the “banking union” component of the Eurozone’s debt crisis management efforts. Asked about the time frame for the setup at a joint press conference over the weekend, French President Hollande said “the earlier, the better” while Germany’s Merkel countered that the arrangement “has to be thorough, the quality has to be good and then we’ll see how long it takes.”
Having peaked at $1.63 on Friday, GBP/USD opened at $1.6220 this morning but a general lack of UK data early this week is likely to keep the pound struggling for direction. The euro is more settled against the pound, with euro-sterling trading in a tight range around 1.2530.
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Posted in Daily Market News on May 30 2014
Retail sales in the UK fell 0.2% in August as people put off shopping to watch the Olympics, according to the Office for National Statistics (ONS). On balance, retail sales held up well during the summer as shops discounted sharply to lure customers and the decline was mainly driven by...VIEW FULL ARTICLE
Posted in Daily Market News on Sep 21 2012 by alex