UK retail sales surged in January, seeing an uplift of 1.8% month-on-month. The initial forecast was telling us a different story, with expectations of a decline down to 0.2% from December’s low of 0.4%. Main contribution to the lift for retail sales were coming from the online sector, seeing strong performances. Even if consumer confidence seemed to be higher for January, leading to more spending expectations for 2026 is still weak on the front of an expansion for consumer spending growth. The challenges facing is still coming from inflation and a tight labour market causing this.
At 9.30am S&P global manufacturing and services will be announced. With forecasts still above the 50 levels, it is suggesting a decline for both manufacturing and services month-on-month. Recent pressure on businesses with rising costs for employees can be a main contribution to expected falls, as we have seen unemployment levels rise in the start of this week.
The afternoon focus will shift to the US and PCE (personal consumption expenditure). This is seen as one of the favourable metrics for the Federal Reserve to measure inflation levels. In four consecutive months we have seen PCE hold a level of 0.2%. For January expectations is an uplift to 0.3%, which would propose inflation levels are rising once again.
GBP/EUR 1.1432 GBP/USD 1.3455 GBP/AED 4.9437
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GBP/NZD 2.2597 EUR/USD 1.1757 GBP/ZAR 21.7035