Retail sales increased 1.5% year on year smashing expectations of just a 0.2% increase and significantly higher than the revised 0% figure for October. These figures show the resilience of the UK consumer as they kept spending in November, despite real wages declining once again.
We know that the gap between wages and inflation closed slightly in October and these retail sales figures for November could point to an encouraging November as well. However, retail sales figures are notoriously volatile, and we would need to see more data in order to confirm this strong upward trend.
The pound responded well to the figures, this was the boost that sterling needed to attack $1.3450 with conviction. Eyes will now turn to the Bank of England, optimism from the central bank in light of this week’s encouraging data and the Brexit deal could see momentum carry the pound toward $1.35.
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