On Friday the pound continued its strong run with the prospect of the BoE raising rates for the first time in 10 years growing when a Bank of England policymaker Gertjan Vlieghe largely echoed the BoE’s message a day earlier. Vlieghe, who has been a strong advocate of ultra-low borrowing costs, said rates might need to rise in the coming months.
Vlieghe was the first BoE rate-setter to vote for a cut after Britain’s shock referendum decision in June 2016 to leave the European Union. In July this year, he said a premature hike would be a bigger mistake than one that was slightly late. After his speech, sterling hit its highest level against the U.S. dollar since the Brexit vote last year. Vlieghe said there was still a risk that Brexit will hit the economy harder. “But for now, it seems the net effect of the many underlying forces acting on the UK economy is that slack is continually being eroded and wage pressure is gently building.”
U.S. retail sales unexpectedly fell in August as Hurricane Harvey likely depressed motor vehicle purchases, suggesting a moderation in consumer spending in the third quarter.
The Commerce Department said on Friday retail sales dropped 0.2 percent last month. Data for July was revised to show sales increasing 0.3 percent instead of the previously reported 0.6 percent jump. Motor vehicle sales tumbled 1.6 percent last month, the biggest drop since January, after being unchanged in July. Harvey, which slammed Texas in the last week of August and unleashed unprecedented flooding in Houston, probably hurt sales of automobiles, restraining overall retail sales.
10:00 - EUR: Eurozone Consumer Price Index(YoY) August expected to be unchanged at 1.5%