According to the British Retail Consortium (BRC) sales growth rose by 0.6 percent, which is the slowest increase since its records began in 1995. Meanwhile, like-for-like sales fell by -1.6 percent following May’s slump of -3 percent. Commenting on the data, BRC Chief Executive Helen Dickinson said: “Overall, the picture is bleak: rising real wages have failed to translate into higher spending as ongoing Brexit uncertainty led consumers to put off non-essential purchases.
“The continued risk of a no-deal Brexit is harming consumer confidence and forcing retailers to spend hundreds of millions of pounds putting in place mitigations.”
However, while the data undermined demand for the pound, the euro hasn’t been in high demand either.
On Monday the Eurozone Sentix investor confidence index slumped further than expected, sliding from -3.3 to -5.8.
Single currency sentiment was left dampened as this was the lowest reading since November 2014.
Further disappointing data came in the form of a sub-index for Germany, which plummeted to -4.8 from June’s reading of -0.7.
This was the lowest in almost a decade, and commenting on the bloc’s largest economy, Sentix Director Partick Hussy said “a recession looks unavoidable.”
Looking ahead to Wednesday, the pound might be able to fight back against the euro following the release of May’s UK GDP data.
If it is revealed that the UK economy expanded more than forecast, Sterling could receive an upswing of support.
UK manufacturing and industrial production data for May is also expected to show a rebound – a return to positive output could shore up GBP exchange rates.