In recent weeks, we observed the GBP follow a downwards spiral due to the ambiguity of the entire Brexit process, whilst Theresa May’s successive failed attempts to present a deal which all parties that are involved agree on was not well-received. have sent the currency tumbling down, despite sudden green, sky-facing spikes.
In addition, the upcoming events that we previously discussed and explored, such as the election that will take place on May 23rd, 2019, determining whether an early exit from the EU is feasible, might cause the Sterling Pound an extended depreciation that has not been seen since the 2015 Flash Clash during which it depreciated by 25%*.
However, how does the country fare in other areas of business and expansion amidst the uncertainty of Brexit? Areas such as trade, which is a major issue highlighted in May’s different exit plans, employment, earnings and sales.
Firstly, the UK has recently released the results of Retail Sales and Core Retail Sales (YoY, MoM, 18th April, 2019) in which the numbers seem to have improved. For instance, Retail Sales MoM has jumped from a negative forecast at -0.3%* to a positive 1.1%*. Analysts argue that this might be a seasonal change, which might also tie in with the effect on the GBP, as seen below:
Additionally, the Average Earnings Index for March, 2019 showed continued growth in earnings paid by British businesses and the UK government jumping from a forecast of 3.2%* to an actual of 3.4%*. April showed a slow-down with the forecast and actual coinciding at 3.5%*.
Employment-wise, the UK has mostly shown positive results, with increases in number of people employed in both March and April, reporting 179.0K* jobs against a forecast of 173.0K*.
At the same time, CPI/Core CPI for the UK both came out negative, reporting CPI (MoM) a 0.2%*against a forecast of 0.3%* and Core CPI (YoY) at 1.8%* against a forecast of 1.9%*.
Next month brings with it news as to what will be decided for an exit date. That means the UK might leave earlier than the given deadline October 31 or further delays and unrest might be produced.
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NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
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