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Pound marches higher as sun shines on shops
by Chris Marshall on Aug 15, 2013 at 09:58
Mark Carney has certainly not yet convinced markets. Another shining economic data report this morning – this time showing growing retail sales – provided more strength to the pound as investors bet on interest rates rising sooner than the Bank of England governor might have us believe.
Sterling, already higher in anticipation of a strong report, leapt another 0.5% to $1.5575 as retail sales grew by a forecast-smashing 1.1% in July. The gains came even as economists cautioned that the rise was partly lifted by July’s unusually hot weather.
The pound’s strength comes after gains yesterday that were spurred by the revelation that Monetary Policy Committee member Martin Weale had his doubts about governor Carney’s plan to tie interest rate rises to unemployment, a tactic known as ‘forward guidance’.
‘With the economy also creating jobs we continue to feel that rate hikes will come much sooner than 3Q16 as implied by BoE forecasts,’ commented ING Bank economist James Knightley after the release of the figures.
The US Federal Reserve’s Ben Bernanke, on the other hand, has long had markets eating out of his hands. The latest concerns about the potential ‘tapering’ back of the Fed’s huge stimulus scheme had equity investors spooked on Thursday morning, with shares lower across Europe and Asia.
The heightened tapering angst comes ahead of a busy schedule of US data, with updates on CPI inflation, jobless claims, as well as reports on manufacturing and industrial production all due today.
Britain’s FTSE 100 fell 0.36% to 6,563, with only a dozen shares on the leaders’ board, led by Imperial Tobacco (IMT.L).
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by Danielle Levy on Dec 12, 2013 at 09:03