Better than expected UK economic data has failed to help the British pound extend its gains for the fourth day in a row. The RICS house price balance was higher than expected last month, suggesting stabilization in the housing market.
Meanwhile retail sales as measured by BRC also rose by the most in 4 months while industrial reproduction rebounded. This should be welcome news for the Bank of England who like the ECB needs to concentrate on containing inflationary pressures. If growth continues to stabilize, a rate hike may even be possible. However before that can even happen, we need to see an improvement in the labor market. Tomorrow, the UK will be releasing its employment report and their trade balance. Given the drop in the employment component of the service and manufacturing PMI report, the pound may not receive support it needs from the employment numbers.