Pound V euro: GBP drops as UK wage squeeze bites into retail sales
THE pound has made a -0.5 per cent loss against the euro today, following a spread of disappointing UK retail sales figures.
This puts the pound at €1.113, just over a euro cent down from the start of the week.
The only notable pound gains have come against the New Zealand dollar, where GBP has risen by 1.3 per cent because of a dramatic change in the national government.
Seemingly showing the real effects of the ongoing UK wage squeeze, today's UK sales figures have shown a monthly drop of -0.7 per cent in September, excluding fuel sales.
Monthly sales with fuel have dropped by -0.8 per cent, while elsewhere year-on-year sales have slowed by more than forecast.
September's retail sales saw a monthly decline of 0.8 per cent, reversing August's growth
Kate Davies, Senior Statistician at the ONS, said: "September's retail sales saw a monthly decline of 0.8 per cent, reversing August's growth.
"However, there is a continuation of the underlying trend of steady growth in sales volumes following a weak start to the year, and a background of generally rising prices".
If UK retail sales continue to fall in the months ahead, especially after Christmas, then further pound losses could be on the horizon.
In other news, Prime Minister Theresa May faces calls to deliver an ultimatum to the EU - let the UK discuss trade deals, or the country will be prepared to leave with no deal.
This call comes from a letter sourced by the Leave Means Leave campaign, which believes that it is time to throw down the gauntlet to EU officials.
Leaving without a deal would put the UK on WTO trading rules, which some believe are worse than a bespoke deal with the EU.
While the euro has risen against the pound today, all is not well in the multinational union.
In Spain, the government has decided to crack down on the Catalonian regional government after another missed deadline.
Catalonian President Carles Puigdemont had until this morning to declare independence or back down from independence efforts, but instead sent a letter doing neither.
In the letter, Puigdemont threatened to declare independence if the government tried to limit Catalonia's power, via the implementation of Article 155.
The government has called his bluff, however, and is set to start taking over regional powers on Saturday. All eyes are on Puigdemont now, as well as the streets of Barcelona.
The week might get even worse for pound traders tomorrow, when the UK government borrowing balance is announced in the morning.
Estimates are for the August borrowing deficit to expand in September, from £-5.09bn to £-5.7bn.
This would put more pressure on Chancellor Philip Hammond before November's budget announcement and could trigger a pound slump.
Returning to the Spanish situation, the euro could dive against the pound if there is a violent reaction to the government's plans.