The UK RICs house price balance fell to -84.2 in September from -81.8 in August while BRC retail sales fell 1.5% in September, the forth straight monthly decline.
Normally, the market would have a tizzy at such lousy data but given the extraordinary action taken by the global authorities in recent days, markets are looking ahead and not behind at the moment. The BOE eased 50 bp last week and the entire UK banking system has been restructured. The economy should limp along for a while but it’s not like governments are unwilling to act. The UK, after being caught flat-footed for much of the credit crisis, is now in a leadership position on the way out. This should buy the pound a bit of good will.
Cable trades above its 10-day moving average, now at 1.7445, about 6.5 cents above Friday afternoon’s spike low. 1.7660 is the near-term topside target.
