Consumers appear to be taking the latest Brexit news in their stride as February’s retail sales provide the Pound with a last minute boost before Government plan to invoke Article 50 next week. February’s retail sales exceeded analyst expectations, prompting a spike in Sterling’s favour.
The latest figures came out at 1.4% (MoM) and 3.7% (YoY), with a consensus for 0.4% and 2.16% respectively.
GBP investors can breath a sign of relief at this stage, as expectations for slower consumer spending in the wake of higher inflation may become the norm due to the dip in the Pound’s value.
Business as normal
Economic data continues to defy the Brexit vote in which forecasts predicted a gloomy outlook for the UK economy, but even in the midst of uncertainty consumers continue to shrug off the stark warnings made before and after the results.
The real issue now is how well will the UK economy perform once Theresa May gives notice of an EU-exit and how will consumers and businesses react once negotiations begin to take form.
Think tank Civitas questions single market benefits
A new report produced by think tank Civitas has labelled the benefits of EU membership as “largely imaginary”, arguing that exports from non-EU member states to the bloc grew 5 times faster that that of the UK.
In a sign that EU officials may be relaxing their stance towards Brexit Britain, Michael Barnier – the EU’s Chief negotiator for Brexit has warned that a ‘no deal’ option would be catastrophic for both parties. Barnier has called for a smooth period of negotiations and has not ruled out a few trade agreement with the UK within the time frame for Article 50.
It goes without saying that a no-deal scenario, while a distinct possibility, would have severe consequences for our people and our economies.
– Michael Barnier
He did add that the UK must settle its financial bill for exiting the EU, a move that has been ridiculed by Brexit officials Boris Johnson and Liam Fox. Early reports suggest EU officials will not enter negotiations with the UK until the bill is settled.
The Pound is trading above 1.16 against the Euro as of this morning’s trading session, which signals a more favourable stance towards the UK.