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Today we will find out how the UK’s Retail Sales numbers faired for September. Analysts are predicting +0.40% from -0.20% in August. Let’s not get ahead of ourselves here. The rise (if it comes out as expected) is the result of the mini tourist boom since the GBP collapsed 20%. Retailers have been reporting mixed results of late with the likes of Burberry up 30% and while Ryanair down 5% and Foxton’s 34% all pointing to the weak GBP being the reason. Barclays reported in the daily Global Macro that “The UK labour market continued to show resilience in August, with the lowest unemployment rate since September 2005 and core wage growth hovering around 2.2% since October 2015. We expect Brexit to push up unemployment only gradually, likely at the turn of the year, and prevent upward wage growth pressures from building, thus forcing households to be more prudent and reduce private consumption by end-2017.” In my commentary yesterday I noted that with inflation heading to 2% (and the rest) net income amongst households will fall resulting in a change in shopping habits amongst consumers. As wages stagnate (and potentially fall in real terms) and companies put investments on hold, consumers will become aware of the changes to their incomes pushing up demand for benefits and further straining the Treasury.

PM May will announce to the EU (today) that there will be no second referendum on the UK’s EU membership. EU President Tusk has noted the UK’s future relationship with the EU will not be on the formal agenda but will give the PM the opportunity to set out the “current state of affairs in the country” over coffee. Coffee …. Ha ha is that the best the UK can do now. Oh how the mighty have fallen. In other words it proves just how far down the UK is on the priority list for the summit (& EU).

The decision by the UK’s Treasury to allow pensioners to sell their pension annuities has been scrapped by the Government amid warnings it could have turned into a mis-selling time bomb. Or is it a case that PM May wants to distance herself even further from Mr Cameron and Osborne’s policies. With every passing day the PM is tearing up all the good work the former leaders achieved and which sent the UK to the top of the global GDP tables. With one swipe of the pen, we now find ourselves heading towards numbers the likes of Zimbabwe. So where to from here you might ask…the simple answer is probably lower but then again anything can change that. Overall we know what will happen when Article 50 is invoked and we officially leave the EU. We know the EU will not give us a handout without safeguarding their 27 members. While the GBP managed to rally from 1.2150 Monday to 1.2350 yesterday, we now await the next round of comments. What is certain is all the recent bad news has been blamed squarely on Brexit and rightfully so. What a shame really as things we scootering on by so nicely and everyone was feeling perky and spending. Now that’s all changed and businesses and consumers are feeling worried (the remainers). The leavers well they will simply not admit to anything. It’s a lie and scaremongers didn’t you know !!!




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