The pound has jumped to its highest level of the week against the US dollar in recent trade after the latest consumer spending figures came in far better than expected. UK retail sales for for May increased by 1.3% compared to the prior month, with the gain all the more pleasing given that the April reading itself was revised higher to show a 1.8% monthly gain from 1.6% previously.
Looking more closely at some of the components the core reading, which strips out car and fuel sales, also jumped, showing a 1.3% increase. Some good weather, two bank holidays and the Royal Wedding all contributed to the pick-up in spending and the good news has jolted the pound higher.
Today’s release was the last of several major data points this week, and the overall feeling is one of steady if not spectacular improvement for the UK economy after a slow start to the year. There’s probably not been enough good news here to have a significant impact on the Bank of England’s thinking with regards to an August hike but, the pick-up in data, as well as positive developments as far as the government is concerned on Brexit this week, is pleasing nonetheless and has boosted sterling across the board.
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