UK – Coming Back From the Dead?
Skerdian Meta • 1 min read
The recent data of the last few months has shown that the UK economy has been slowly failing. Brexit fears are kicking in and almost all sectors of the economy are panicking and declining fast.
The pace of pickup in average earnings has declined by 0.6% in the last couple of months. Retail sales have also declined over the last three months.
Today, on the other hand, we saw a jump in retail sales. The headline retail sales number was expected at 0.4% but the actual number was 1.4%. That takes the yearly sales number up to 3.7% from 2.6%.
That´s an impressive jump and the core retail sales, excluding fuel, moved to 1.3% from an expected 0.5%. This takes the yearly number to 4.1%.
The yearly number is moving up nicely
These are some really decent numbers, particularly compared to several months worth of negative numbers. Has the UK economy suddenly forgotten all about Brexit, which is coming next week (29th)?
I have my doubts – this is more of a dead cat bounce. Nonetheless, the Quid has jumped more than 50 pips after the release and we´re trading above 1.25 in GBP/USD.
This forex pair has retraced upwards quite a bit in recent weeks. The problem remains that net shorts are overcrowded right now, so we might see a brutal short squeeze after Article 50 is triggered next week. We´ll post another update about the pair and what we expect in the mid/long term shortly, so check in again shortly.