The FTSE is down 20 points in early trading this morning with Unilever the biggest casualty following disappointing third quarter sales, leading to a drop of 3.5%.
The main driver for the FTSE is coming from weakness in the Dollar which has boosted the Pound to the detriment of the UK’s flagship index.
The Pound is benefiting from a positive set of numbers following yesterday’s better than expected employment data. Investors are, however, still wary of comments made by the Bank of England policymakers earlier this week which suggest n interest rate hike is still far from certain.
“The conundrum faced by the Bank of England is: raise rates because inflation is high and unemployment is low, but, if you raise rates it puts extra pressure on the consumer and a sharp break on the economy as we close out 2017.” commented FxPro analyst, Edward Anderson. “The markets are convinced there will be a rate hike in November but, faced with the above conundrum, this may be difficult for the Central Bank to impose.”
Investors will be watching the Pound and FTSE closely this morning as UK retail sales figures are released. Spreadex analyst, Connor Campbell noted “The pound could really do with a surprise retail sales bounce to recover what has been a tough few days of trading. As it stands, however, analysts are expecting a drop from 1.0% in August to -0.1% in September, which would be the worst reading in 4 months.”
