UK: Encouraging data - Westpac
|Tim Riddell, Research Analyst at Westpac, notes that the recent UK data has mostly been encouraging.
Key Quotes
“Although CPI has pulled back to its presummer sliding trajectory, as BoE has also projected, the impact on the rise in basic wages growth means that there is a notable and encouraging lift in real wage growth.”
“However, the lack of core hard data after retail sales means that the Brexit impasse, increased domestic political pressures and yet further uncertainty will dominate and make for a difficult budget on 29th October.”
“Solid fiscal receipts have given Chancellor Hammond some leeway, but this had been slated to counter the potential negatives from a no-deal cliff-edge Brexit. Now that May has promised support for NHS and other welfare initiatives, Hammond will have to seek more funding measures in a budget that could be further impacted by the fallout from the current Brexit impasse.”
“Political pressures will rise as May faces a frustrated government and country. Unless a surprise break of the Irish border impasse can be found, GBP/USD should slide to the lower end of its 1.27-1.35 range.”
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