Retail sales in the Eurozone’s largest economy slumped by -1.9 per cent in October, and September sales were downwardly revised. The decline in sales was the largest since December 2018, but the data was offset as a separate report showed that German unemployment held steady at 5 percent. This suggests the German labour market remains strong despite weakness within the country’s manufacturing sector.
Commenting on this morning’s data, head of the Labour Office, Detlef Scheele noted: “The current economic weakness is still noticeable in the labour market. All in all, however, it remains robust.”
Meanwhile, Sterling remained under pressure at the end of the week as data revealed confidence amongst UK consumers was stuck at a six-year low.
GfK showed that thanks to Brexit pessimism and UK election uncertainty, November’s confidence reading remained at -14, the joint-lowest since 2013.
Commenting on the data, client strategy director at GfK, Joe Staton stated: “In the face of Brexit and election uncertainty, consumers are clearly in a “wait-and-see” mode.”
Today’s data was in line with other indicators and painted a relatively subdued picture of the British economy, weighing on pound sentiment.
Looking ahead to Monday, the single currency could decline if PMI data reveals Germany’s manufacturing sector remains firmly in contraction, but UK political headlines will also be a key driver of GBP/EUR movement.