Pound Remains Subdued Against Euro Despite Positive December UK Online Retail Sales

Published: Wednesday, 9 January 2013 09:00 BST - Written by Toni Johnson

STORY LINK Pound Remains Subdued Against Euro Despite Positive December UK Online Retail Sales

Yesterday’s figures from the British Retail Consortium (BRC) revealed a marked alteration in the way UK economic participants are buying their goods and services. The December retail sales figures from the BRC showed a near 20% annualised increase in the value of online non-food orders, dwarfing the overall year-on-year increase in British shop sales, which printed at a more modest 1.5%. It appears that this Festive period has marked a paradigm shift in British shoppers’ willingness to give internet shopping a whirl. The consequences for the UK’s High Street stores could be devastating.

Elsewhere, yesterday’s session also saw the release of another worrying set of eurozone labour market figures. The data for November showed that a record 11.8% of eurozone residents are without a job. This figure provides a stark illustration of the decimating effect which the credit crunch has had on European nation states; in the early part of 2008, the overall level of unemployment in the region stood at 7.2%. Particular hotspots for European employment are to be found in nations which have endured the most stringent austerity measures in recent years – an astonishing 26.6% of Spanish workers remain unemployed, whilst one in five Greek workers is without a job.

The dismal eurozone labour market data has triggered calls from economists for an increased emphasis on growth from the eurozone’s policymakers in 2013. When the region’s debt crisis initially took hold some three to four years ago, analysts considered a ‘sound money’ book-balancing approach from Europe’s policymakers as vital in order to reassure the jittery markets. Now that investors’ concerns regarding an imminent break-up of the euro have eased, it would appear likely that the EU and ECB will take a more expansionary approach to fiscal policy – a move which is likely to play well with the markets. Such an outcome could see the euro well-supported as the year progresses, seeing the GBP EUR exchange rate (GBP EUR) further descend from last July’s four year high in the 1.2800s.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Daily Currency Updates Euro Forecasts Euro Pound Forecasts Pound Eu Forecasts