British Pound Fails to Waver on Weaker Economic Data

The British pound rose over 200 pips today despite a disappointing survey of CBI distributive trends.

According to the report, sales fell for the first time in over a year. However Bank of England member Besley is not alarmed by the weakness of consumer demand and in fact, he feels that the recent fall in the British pound should help exporters. It will be interesting to see if the British pound is able to hold onto its gains following the GfK consumer confidence report and GDP. We expect growth to slow in the fourth quarter as retail sales dropped two out of the last three months of 2007.