- Pound (GBP) steadies after strong gains yesterday
- Grocery inflation hits 14.7%
- Euro (EUR) rises after retail sales beat estimates
- ECB speakers up next
The Pound Euro (GBP/EUR) exchange rate is edging lower after strong gains in the previous session. The pair rose +0.6% yesterday, settling at €1.1485 after trading in a range between €1.1345 – €1.1509 across the session. At 08:45 UTC, GBP/EUR trades -0.08% at €1.1478.
The pound is treading water in a quiet start to the session as investors digest the latest gloomy bits of data surrounding the UK economy. According to Kantar’s, the market research agency, British grocery inflation rose to 14.7% in October, meaning that consumers would face a £682 jump in annual grocery bills when buying the same items. Within the survey, 90% of the group said that higher food and drink prices are a major concern.
The figures come as British businesses are growing increasingly worried about the bleak times ahead. Barclaycard reported that 48% of people surveyed plan to spend less this Christmas and 42% plan to cut back on socializing.
The reports have been coming in thick and fast, highlighting the troubled times ahead. This week the main focus for the pound will be on UK GDP data on Friday, which will be the first look at how the UK economy performed in the July – September quarter.
The euro is rising on Tuesday after the latest Italian retail sales data. Retail sales rose by 0.5% month on month, after falling -0.4% in August. Estimates pointed to a 0.3% rise. Eurozone retail sales are due shortly. Sales are set to rise despite high interest rates and record levels of inflation squeezing the consumer.
The data comes after upbeat data yesterday, which showed that German industrial output rose by more than expected in September, up 0.6% after falling -0.8% in August. Data also revealed that Eurozone investor confidence also improved by more than expected in November, rising to -30.9, up from -38.3.
Looking ahead, attention will be on ECB speakers Luis de Guindos and Andrea Enria. Investors will be looking for comments and clues surrounding the economic outlook, inflation and ECB monetary policy