LONDON: The British pound dipped on Friday after weaker-than-expected retail sales numbers but remained close to recent highs after recent survey data and policymaker comments underlined the threat of further inflationary pressure.
British sales volumes dropped by 0.2% in September, official figures showed on Friday, bucking economists' expectations in a Reuters poll for a monthly rise of 0.5%.
That miss coincided with more signs of rising inflation. A record proportion of the British public thinks inflation will accelerate over the next 12 months, according to data that could further heighten anticipation that the Bank of England will raise interest rates as soon as next month.
Some 48% of people surveyed this month by consumer research firm GfK expected prices to increase more rapidly over the next 12 months, up from 34% in September. The BoE's new chief economist, Huw Pill, said inflation in Britain could surpass a "very uncomfortable" 5% and the question of whether to raise interest rates would be a "live" one at its Nov. 4 meeting, the Financial Times reported.
Flash purchasing managers index survey data for October showed that Britain's economy unexpectedly regained momentum in October, despite surging costs and mixed consumer signals. The index rose by the largest amount since May to hit 56.8, up from 54.9 in September. By contrast, a Reuters poll of economists had pointed to a further slowdown to 54.0.
But the pound remained weaker in late London trading. Sterling has risen - although not markedly - as traders in recent weeks rushed to price in tighter monetary policy, including an initial 15 basis points hike next month.
Comments
Comments are closed.