Even though the GBP/INR is slightly bullish on Tuesday, it has lost momentum after rallying for four sessions in a row. Currently, one British pound buys 95.951 Indian rupees, up 0.05% as of 6:10. Earlier today, the price peaked at 96.398, which is the highest level since March 6. However, it proved to be a resilient resistance level.
On Monday, the sterling reacted to the comments made by Bank of England (BoE) chief economist Andy Haldane. He said that the UK was experiencing a record level of inactivity in the labor market. He stated:
“We’ve seen activity across the economy collapse, and we’ve seen a rapid rise in inactivity among workers – both people being made unemployed, but importantly ... 8 million people underemployed due to furlough schemes.”
Last month, the central bank said that the unemployment rate might double to 9% during the June quarter, excluding those who benefit from the government’s job support program and are officially kept in work.
BRC’s Retail Spending Fell 5.9% in May
The GBP/INR fell below 95.500 and then recovered by the end of the Monday session. The pair peaked in the morning and then dropped below 96.000. It might not be able to update the daily high after the British Retail Consortium (BRC) reported that total retail spending declined 5.9% in May year-on-year, compared with a record decline of 19.1% in April. Nevertheless, the May figure was still the second-largest drop since the survey was launched in 1995.
BRC chief executive Helen Dickinson explained:
“Weak consumer confidence and social distancing rules are likely to hold back sales.”
Elsewhere, payments firm Barclaycard reported that its broader gauge of consumer spending fell 27.7% last month compared to the same period in 2019. In April, the measure dropped by 36.5%.
While sales at supermarkets and other retailers are recovering, the damage related to the lockdown measures is still visible.
Restaurants and cafes, which saw a 79% drop in revenue in April, reported that sales in May fell 70% year-on-year. Some started to offer more takeaway and delivery services.
In India, several indicators show that economic activity increased in May and may continue to recover after the lockdown started to gradually ease from June 1.
