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GBPUSD Softer on Weakening Industrial Outlook

James Boston
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GBPUSD Softer on Weakening Industrial Outlook

The Confederation of British Industry (CBI) has just released details of it’s key Industrial Trends Survey relating to Orders for the month of October and it is continuing to show a pessimistic outlook among executives in the manufacturing sector. The figure for this month has come in at -6, this represents a further deterioration on last month’s number of -4 from which there was no expectation of a change. The methodology behind this number means that even in growth periods it can struggle to report in positive territory, it is generally a case of the true picture coming from the trend rather than the absolute figure, but nonetheless today’s fall does suggest a softening in outlook among manufacturing companies.

Britain is having an unusually negative day today with regard to the economic data being published. Earlier this morning the British Bankers Association (BBA) reported a fall in Mortgage Approvals from 41.6k in August to just 39.3k in September, markets were again disappointed by this as a number closer to 41.5k had been anticipated.

The most surprising negative figures however came in the form of the Retail Sales data released earlier by the National Statistics Office. Not only was the data generally softer than previously but market expectations were missed right across the board. The headline year on year Retail Sales figure now stands at 2.7% for the month of September, this is a full figure fall from the revised August number of 3.7% and came in slightly softer than the 2.8% anticipated by analysts. On a month on month basis the reversal in growth is clear to see, the September number contracted by -0.3% compared to an expansion of 0.4% in August, the expectation was for a -0.1% fall on the month. The Core numbers fared little better, year on year this figure fell from 4.4% to just 3.1% while the month on month change reversed a 0.3% gain into a -0.3% contraction.

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