German industrial production figures out earlier rose unexpectedly, buoying the single currency against a weakened Sterling. Economists had expected to see a contraction, but instead German industrial output rose by 0.5 per cent in March thanks to the increased production of consumer goods and construction activity. However, in yesterday’s Eurozone news it was a different story as the European Commission slashed growth forecasts for two of the largest economies in the bloc, namely Germany and Italy. The economic report from the EC predicts that German gross domestic product (GDP) will only rise by 0.5 per cent in 2019, although this could do little to stop the single currency rising against the pound, which was generally weak due to falling Brexit sentiment.
Meanwhile, data released overnight revealed that UK like-for-like retail sales rose by a higher-than-expected 3.7 per cent in April.
The data found that there were signs that households were becoming less worried about Brexit, with Britons splashing out in restaurants and bars over the course of the Easter holidays.
However, this came at the expense of retailers, with the British Retail Consortium (BRC) revealing that shop sales did not meet expectations.
Commenting on this, Chief Executive at the BRC, Helen Dickinson said: “Retail sales were below expectation this month, as the sunshine over the Easter weekend persuaded many to pursue recreational, rather than retail, activities.”
Barclaycard stated that spending at pubs and restaurants increased by 13 and 10 per cent annually in April.
This contributed to the 2.5 per cent rise in consumer spending.
Later today, European Central Bank (ECB) President, Mario Draghi is due to give a speech in Frankfurt.
If Mr Draghi mentions monetary policy and his tone is overly dovish, it could weigh on the single currency to the benefit of Sterling.