DESPITE improved employment data and improved growth forecast from the UK, lower wage inflation data has become a big thorn in the Bank of England’s side.
Mark Carney has had to backtrack on some his earlier forecasts, saying ‘we will react to the data coming in’. Therefore, he delayed the possibility of an interest rate rise in the UK this year.
On a similar note, contraction in the German economy, zero growth in France meant the Euro was also under pressure from the US Dollar.
It is a familiar truth that the US Dollar becomes the investor’s safe haven currency with geo-political unrest, coupled with good data, we could see GBP vs USD heading towards 1.60 before the end of the year, and Euro vs USD towards 1.25.
I feel a bit of a party-pooper reporting the negative news for the UK and Europe, as there doesn’t seem to be any shortage of money in our Costa del Sol microclimate.
On Thursday evening I went to Puerto Banus and the designer shops and restaurant were buzzing; they’re opening more runways at Malaga Airport and the Saturday market in Centro Plaza is a busy as ever.
It is hard to see any shortage of money or lack of consumer confidence when you’re in Marbella during in August. Despite the oasis of summer holidaymakers, unfortunately the good times will most likely be over when I write my next column.
Let’s talk again in September when conditions are heading back towards normality… and I put my bucket and spade into storage!