UK shoppers flash the cash at the tills
Looking more indepth at the numbers there's some good underlying data that will be welcome by the BOE
The headline numbers were good but the fact that spending rose again is the biggest positive for the economy
Spending amounts fell 0.3% on the month last month but rose 1.8% this month. Year on year spending rose 1.1% vs 0.7% in March. The spending news is good considering that the retail deflator continues to show prices falling. Average store prices fell by 3.2% vs last year. Petrol lead the falls as usual with a 11.5% drop and fell for the 20th consecutive month
The pound has taken these numbers and let off some steam, much like the dollar did with the housing data. Before I get bullish on the economy again I want to see these sorts of numbers coming out every month, particularly the spending info. As long as that's growing (and not being borrowed) then that means confidence is coming back into the consumer, and that means the job gains and wages are filtering through into the rest of the economy
One swallow doesn't make a summer but these numbers have settled some nerves and the quid is making the most of it
GBPUSD is still making new highs at 1.5667 but perhaps the focus should be on EURGBP which has tested a strong support level at 0.7113
EURGBP daily chart
That's where we've stopped to the tick and if it does hold, that might mean the top for cable for now
