European Stock Markets
U.K. stocks tipped lower on Thursday after the pound rallied on the back of better-than-expected retail sales data that brought an August Bank of England interest rate rise back into play.
What are markets doing?
The FTSE 100 index UKX, -0.05% fell 0.1% to 7,784.19, adding to a 1.1% loss from Wednesday.
The pound GBPUSD, +0.4120% climbed to $1.3396 from $1.3348 late Wednesday in New York.
Sterling fell to a fresh 2018 low on Wednesday, after official figures showed U.K. inflation unexpectedly fell in April, seen as dampening expectations for a Bank of England interest rate rise in the summer.
What is driving the market?
However on Thursday, the retail sales data painted a more upbeat picture of the U.K. economy and suggested the economy may be able to stomach a rate hike this summer.
Retail sales rose 1.6% month-on-month in April, beating forecasts of a 0.2% rise, recovering after a spell of cold weather.
Investors in the U.K. are watching data releases closely, after BOE Governor Mark Carney made clear recently that the central bank’s next policy move depends on an improvement in British economic health.
More broadly, traders were still digesting the minutes from the U.S. Federal Reserve’s May 1-2 meeting, which were released late Wednesday.
The minutes suggest the U.S. central bank is on track to hike interest rates in June and is keeping calm about the inflation outlook.
What are markets doing?
The FTSE 100 index UKX, -0.05% fell 0.1% to 7,784.19, adding to a 1.1% loss from Wednesday.
The pound GBPUSD, +0.4120% climbed to $1.3396 from $1.3348 late Wednesday in New York.
Sterling fell to a fresh 2018 low on Wednesday, after official figures showed U.K. inflation unexpectedly fell in April, seen as dampening expectations for a Bank of England interest rate rise in the summer.
What is driving the market?
However on Thursday, the retail sales data painted a more upbeat picture of the U.K. economy and suggested the economy may be able to stomach a rate hike this summer.
Retail sales rose 1.6% month-on-month in April, beating forecasts of a 0.2% rise, recovering after a spell of cold weather.
Investors in the U.K. are watching data releases closely, after BOE Governor Mark Carney made clear recently that the central bank’s next policy move depends on an improvement in British economic health.
More broadly, traders were still digesting the minutes from the U.S. Federal Reserve’s May 1-2 meeting, which were released late Wednesday.
The minutes suggest the U.S. central bank is on track to hike interest rates in June and is keeping calm about the inflation outlook.
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