- Growth concerns gnaw away at the dollar
- Kan ratchets up the pressure on the BOJ over the economy and the yen
- CHF: the preferred safe haven currency
- UK retailers continue to report very strong sales
- German consumer confidence jumps in August
- Italian consumer confidence falls to a one year low
- Bernanke speaks on the economy at 14:00 GMT
Amidst the doom and gloom being expressed about the UK’s economic prospects, the latest survey by the CBI showed that UK retailers continue to report very decent sales. The net balance for the volume of sales in August was well above expectations at +35, a three year high, from +33 in the previous month. Retail orders were the highest since 1994, while clothing sales were the highest since 1988! According to the survey, retailers expect sales to remain strong in the months ahead. Wholesalers likewise are more optimistic than they have been for some time, but motor traders are less hopeful. Interestingly, retailers are reporting higher prices as well – the CBI’s measure of average selling prices rose to +58 in the three months to August (an 18yr high) from +49 in the period to May. Looking forward, there are some uncertainties for retailers, including the VAT hike next year, the sluggish pace of real income growth, concerns over falling house prices and the impact of savage public spending cuts. Where is this growth coming from? A couple of potential explanations – firstly, staycations have been much more common this summer, so UK consumers are spending more at home than usual, and secondly foreigners visiting the UK on holiday (and taking advantage of the cheap pound) have also been higher than usual...Read More
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