The British pound remained weak against the dollar overnight, on news UK consumer spending was weak during October. Survey data from the British Retail Consortium (BRC) showed a record fall in non-food spending.
The data, which were published at one minute after midnight, helped push the British pound down to $1.3000. However, cable didn’t move below that key level and has managed to briefly break through $1.3140.
Disappointing consumer spending
The BRC’s latest monthly survey showed like-for-like retail sales fell 1% in October from a year earlier. Total retail sales -which includes activity at newly opened stores – rose 0.2% from October 2016.
However, of particular disappointment, was the decline in the 12-month average of sales of non-food goods. A 2.2% fall in total non-food sales pushed the 12-month average down to -2.1. That’s the lowest average of non-food sales, since records began in January 2012.
“It was a meagre month in October for retail sales as shopping activity slumped,” said BRC chief executive, Helen Dickinson OBE. “Retailers will have cause for concern as they prepare for the crucial run up to Christmas.”
“Real consumer spending power has been on a downward trend in the last year as the acceleration in inflation has caused shoppers to become ever more cautious in considering what purchases they can afford,” Dickinson added.
US dollar investors cautious
Following the Bank of England’s decision to raise the UK base rate to 0.5% at last week’s meeting and this latest survey suggesting further weakness in consumer spending, there’s little to cheer with regards to the British pound.
US dollar investors, meanwhile, lack any real direction at the moment. US Fed chair Janet Yellen’s speeches are becoming a little less potent, as the end of her tenure draws to a close.
Eyes are also on North Korea for any further resurgence in geo-political issues. At the same time, investors also await the next update on US tax reforms, expected at the end of this week, or early next week.