The British pound remains subdued in Monday morning trading. Investors appear cautious amid continued Brexit uncertainty and following a brace of downbeat UK surveys published overnight.
By 1130 BST, the British pound was trading at $1.3387. While that was a little higher than the £1.3372 it hit at the UK Monday market open, it’s much lower than the $1.3514 it touched Friday.
Weak UK consumer spending
A survey published overnight by Visa, shows UK household spending fell by 0.9% in November from October. While that’s a smaller decline than October’s 2.1% monthly drop, the financial services firm said it doesn’t bode well for Christmas.
“Festive cheer was in short supply for the UK’s retailers during last month as Black Friday promotions failed to lift consumer spending,” said Commercial Visa’s chief officer, Mark Antipof.
“November’s poor performance means that we stand by our earlier prediction that the UK will see its first fall in overall Christmas spending by consumers since 2012,” Antipof added.
Details of the survey showed that spending in physical bricks and mortar shops, fell for a seventh consecutive month. Meanwhile, online spending rose.
BCC cuts UK economic forecast
Adding to the gloomy outlook for the UK, was the latest economic forecast from the British Chambers of Commerce (BCC).
In its latest quarterly economic update, the BCC said it now expects UK economic growth of 1.5% in 2017, 1.1% in 2018 and 1.3% in 219. That’s down from its previous expectations of 1.6%, 1.2% and 1.4%, respectively.
The group said it had reduced its forecast, mainly due to expectations of a lower contribution to economic growth from net trade.
“Despite pockets of resilience and success, and strong results for some UK firms, the bigger picture is one of slow economic growth amid uncertain trading conditions,” said the BCC’s director general, Dr. Adam Marshall.
The BCC’s head of economics, Suren Thiru, was similarly cautious: “The downgrades to our growth forecast confirm that the UK economy is in a challenging period with growth likely to remain well below average for a prolonged period.”