The British pound is heading into the weekend on a good footing after the release of positive economic data yesterday has once again put the possibility of a rate hike on the table from the bank of England in August.
The latest retail sales figures from the UK hit the market at 1.3percent and smashing expectations for a number of 0.5 percent while the yearly figure came in at 3.9 percent against expectations for a figure of 2.4 percent.
Retail sales figures make a aa significant part of GDP and if we see a continuation of this upward trend a rate hike in 2 month’s time is highly possible.
"May’s retail sales figures have added to the evidence that consumer spending growth has picked up some pace following the softness at the start of the year," says Ruth Gregory, a UK economist at Capital Economics.
"Even if sales were to post a big drop of 1% or so in June, they should still rise by a quarterly 1.8% in Q2, the largest quarterly gain since Q1 2016 and a vast improvement on Q1’s 0.3% quarterly fall." He added.
The only thing that kept the pound from moving higher against its US counterpart was the release of retail sales figures from the US which also came in well above expectations with a figure of 0.8 percent and is likely to keep the Fed rate hiking cycle on track as the year unfolds.