A positive end to the week for GBP as April Retail Sales grew by over 1%, by far surpassing the initial expectations of 0.2% growth. This April was the sunniest on record and therefore saw a surge of sales at food retailers. It isn’t just April that has seen strong sales however, with the first quarter of the calendar year also experiencing growth of 1.8%, also the strongest quarterly growth since 2021.
The fact that Retail Sales looks healthy, when put alongside strong inflation and better than expected PMI data, this hat-trick of positive data will no doubt cast doubt on The Bank of England and their plans for further rate cuts this year. Strong inflation in itself calls for rates to be untouched, but this will now be doubled down with the fact consumers are still spending. Market expectations have now changed from a possible two rate cuts by the end of the year to now potentially just the solitary rate cut. Which again is helping Sterling climb higher.
We round the week off with more retail sales but this time from Canada. Initial figures suggest that March’s Retail Sales on a monthly comparison will have risen when including energy, but when removing that metric it looks like it may well have been a tough month for retailers with figures suggesting a potential drop by half a percent. A potential drop in Retail Sales could put CAD under further pressure, whilst an uptick in sales would provide the CAD with some much-needed breathing space.
GBP/EUR 1.1880 GBP/USD 1.3481 GBP/AED 4.9538
GBP/AUD 2.0889 GBP/CHF 1.1136 GBP/CAD 1.8626
GBP/NZD 2.2679 EUR/USD 1.1335 GBP/ZAR 24.1425