“I worry about the fact that inflation has been very high, and the dynamics of payment have been stubbornly strong.”
While inflation and spending pressure challenged BOE pigeons, PMI data resumes uncertainty on the rate path. The May flash PMI survey further indicated a sharp recession, potentially revived bets on BOE rate cuts. Simon Pitve, Senior Economist at Regulation Foundation, Comment,
“Overall, it is welcoming that the rate of increase in activity has stabilized after a sharp decline in April. But with suggesting the shrinking activity of the headline index, it is rare to challenge the approach that GDP growth will slow down from Q1 to Q2.”
GBP/USD reacts to retail sales report
Beyond the release of UK Retail Sales data, GBP/USD briefly fell to a low of $ 1.34057 before rebounding at a high level of $ 1.34588.
After the release of UK retail sales data, GBP/USD reached a high level of $ 1.34606 before reducing back. On Friday, 23 May, GBP/USD ranged from 0.31% to $ 1.34594, which shows market sensitivity to statistics and their implications for BOE.