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Rate rise nears as pound rebounds
Published on 23.03.2017 22:19

The British pound had made a comeback today on the back of solid local data, brushing off yesterday’s terrorist attack, which sent the UK into panic mode.

At 4.38pm (GMT) the British currency was trading at $1.2516 against it’s US counterpart up from $1.2484 in yesterday’s trading.

Retail sales figures form the UK released earlier today hit the market at 3.7 percent on a yearly basis, while the monthly figure rose 1.4 percent in February according to the Office for National Statistics, and was well above analysts expectations which immediately boosted the pound above the $1.25 mark.

It’s seems now that British consumers have put the fears of Brexit behind them and are adjusting to the aftershocks that it has caused,

"A comeback for UK Retail Sales in February challenges the notion that UK consumers are delaying activity due to the overhang of Brexit uncertainty," Saxo Bank's head of FX strategy John Hardy said

The figures have given more ammunition to the Bank of England to raise interest rates in the coming months and follows on from strong CPI figures released earlier in the week.

 “This will likely strengthen the ongoing market speculation about BOE policy normalization before long given the hawkish dissent we had at the MPC meeting last week and the above-target inflation for February released on Tuesday,” said Valentin Marinov, head of G-10 FX research at Credit Agricole.

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Andrew Masters

Analyst

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