The British pound saw a slight increase on Friday morning, trading at $1.2397, marking its lowest point in nearly nine months. Retail footfall in the UK declined by 2.2% in December, reflecting ongoing economic challenges. The purchasing managers' index fell to 47, signaling a significant slowdown in manufacturing activity. Meanwhile, gold prices softened after a strong start to the year, while oil prices also experienced a minor dip following earlier gains. The FTSE 100 remained stable, trading at 8,257.63 points.
Economic Challenges Weigh on UK Manufacturing and Retail Sectors
Recent data highlights the struggles faced by the UK's retail and manufacturing sectors. The decline in high street footfall during the crucial holiday season underscores weakened consumer confidence. Additionally, manufacturing output has contracted significantly, raising concerns about the broader economic outlook. These factors contribute to the pound's recent depreciation against major currencies.
The British Retail Consortium reported a 2.2% drop in footfall for December, with a 2.5% decrease over the past three months. This downturn coincides with a sharp decline in factory output, which fell at its fastest rate in 11 months. Rob Dobson from S&P Global Market Intelligence noted that manufacturers are facing increasing pessimism due to weak domestic and export sales, as well as rising costs. Business sentiment is now at its lowest in two years, influenced by policy changes and economic uncertainty.
Gold and Oil Prices Reflect Mixed Market Sentiment
Precious metals and crude oil markets exhibit mixed trends amid global economic signals. Gold prices have softened slightly, while oil prices dipped after earlier gains driven by positive Chinese economic data. Investors are turning to safe-haven assets like gold in response to geopolitical and economic uncertainties. However, potential trade disruptions could impact energy demand and market stability.
Gold prices eased by 0.2%, trading at $2,652.31 per ounce, despite a robust start to the year. Analysts attribute this movement to increased safe-haven flows, which benefit gold during uncertain times. Tim Waterer from KCM Trade suggested that any weakening of the US dollar could boost gold prices further. On the other hand, Brent crude futures fell 0.3% to $75.71 per barrel, and US WTI crude dipped to $72.92 per barrel. Susannah Streeter from Hargreaves Lansdown pointed out that oil prices reached two-month highs due to reduced US stock levels and hopes for stimulus in China’s energy-intensive economy. However, the future remains uncertain, especially with the potential for new tariffs affecting global trade and energy demand.