Will Retail Sales Be the Last Nail in the Coffin for the GBP?
The economic data from Britain has been pretty bad recently, showing that Brexit is finally showing the ugly side as the different sectors of the economy have fallen in contraction. Looking at just this month’s figures, the picture looks quite dark for the British economy.
Manufacturing and construction PMI reports showed that these two sectors fell in contraction in May, declining to 49.4 and 48.6 points respectively. Services increased a little, but at 51 points this sector is still close to stagnation. The GDP report have been showing that the economy has shrank in the last two months.
Manufacturing production declined by 3.9% in April as the report released last week showed, while construction output has been negative in the last two months. Yesterday we saw the industrial orders expectations indicator fall further into negative territory and come at -15 points.
Yes, inflation is holding up well, despite a small decline yesterday and earnings are also holding up, despite a small decline there as well. But, the rest of the economy is diving pretty fast, which confirms the idea that it was not crashing at the start of this year due to inventories’ build-up by British firms ahead of Brexit.
Today’s retail sales will be another indicator to show the shape of the UK economy and they are expected to have declined by 0.5% in May. The Bank of England meeting is coming up later, so this report might have a say in their bias as well.
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