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Brexit drags latest UK data

Tuesday, August 30, 2016 - 01:52

The latest data readings - and the jury - is still split over what impact Brexit is having on Europe, while globally, markets shrug off Janet Yellen's warnings of an early US rate hike to come. David Pollard reports.

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Summer living in Brexit Britain still means going to the shops. And how: retail sales rose rapidly last month, consumer morale apparently rebounding after a big fall in the wake of the UK's June referendum. Every silver lining, though, could have its cloud. SOUNDBITE (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "Part of the boost of consumer confidence was related to better weather. We know that that will not sustain. And whilst we know also that tourism spending was up and that will continue to get a boost from the weaker pound, we also know that the weaker pound will bring import price inflation. That will affect consumption because it will act as a tax in consumers' pockets so demand is likely to decrease from domestic consumers." The UK's famously hungry house-buyers could be feeling the Brexit pain even now. Latest data shows consumer credit in its first year-on-year dip since December 2014. Mortgage approvals slowing last month to their lowest since January of last year. Companies, too, scaling back their investment plans. While, elsewhere, new data shows Japan has its own problems with household spending: down 0.5 per cent on the year. That and Brexit tempting markets to disregard Janet Yellen's hints of an early US rate hike. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "Markets are pricing a very minimal chance of September, but still only about a 50/50 chance that there's any kind of a rate hike this year. That perhaps is underpricing it slightly. I think if the economic data stays within its current rage, once we get past the US elections, the chances of a rate hike do improve quite dramatically." For now though, many are pinning their hopes on more policy easing from the BoJ, ECB or BoE instead. That helping European shares rebound on Tuesday after their fall the previous session.

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Brexit drags latest UK data

Tuesday, August 30, 2016 - 01:52