Another week of mixed fortunes eventually left sterling only 0.2% lower on average against the other majors. It was unchanged against the euro and added seven eighths of a US cent. On Wednesday the pound shared last place with the NZ dollar and the following day it led the field.
The trickle of UK economic data during the early part of the week was positive for sterling. House price measures from Halifax and the RICS both portrayed robust demand for residential real estate. Halifax reported that house prices rose 1.3% in May, putting annual growth at 9.5%. In its statement, the building society said that evolving tastes, growing confidence and a further easing of restrictions “are likely to support house prices for some time to come, particularly given the continued shortage of properties for sale”. Bank of England Chief Economist Andy Haldane was also chatting about the property market, saying it was, “on fire” and that the economy is “going gang-busters”.
The BRC reported that “Retail sales were buoyant in May thanks to the reopening of hospitality, coupled with the afterglow of non-essential retail’s own return”. Sales for the month were up by 18.5% from May last year. Sterling’s only real stumbling block was Brexit. The EU told Britain that continued failure to comply with the withdrawal treaty would result in economic sanctions, and US President Joe Biden warned the UK PM not to imperil the Good Friday peace agreement.
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