Strong Retail Sales figures have helped Sterling in its ascendency this week. UK Retail sales grew by the most in over a year in March as the unusually warm weather boosted clothing and gardening sales. The oil price hikes that gave rise to a series of petrol panic buys also contributed to the marked increase.
Retail Sales rose by 1.5% on the month compared to a predicted increase of only 0.4%, and the figure rose by 2.8% on the year, compared to an expected rise of only 1.3%. The data added to the growing feeling of optimism surrounding the UK economy that it may have grown thus far 2012. Earlier this week the Bank of England’s Monetary Policy Committee voted 8-1 to keep quantitative easing on hold, and UK Unemployment fell from 8.4 to 8.3%.
“The government will be breathing a sigh of relief… it looks like the first quarter might squeak out a small positive expansion in output” said David Tinsley of BNP Paribas.
The Office for National Statistics release their quarterly report at the end of the month and if UK GDP figures reflect investors’ confidence then the Pound could build upon recent gains and push on forward to even headier heights.
The Pound to Euro Exchange Rate is currently 1.2218, a 19-month high. The pair could reach 41-month highs in the region of 1.2400 if the report goes as planned, but if it turns out that the UK has posted negative growth in the beginning of 2012 then GBP/EUR is forecast to drop down to 1.2000 as this would represent a technical recession.
The Pound has also posted gains against a raft of other major currencies this week following the results.
The Pound to US Dollar Exchange Rate is 1.6104, the highest level since September 11th 2011.
The Pound to Australian Dollar Exchange Rate is up 0.35% to 1.5578.
The Pound to New Zealand Dollar Exchange Rate is up 0.40% to 1.9788.
The Pound to Japanese Yen is also up to 131.6400, marking an increase of 44 pips.