It wasn't a good previous week for the Britons; industrial production shrunk last month which also helps explain why business investment (QoQ) has contracted since the beginning of this year. Payrolls have also increased by a mere 0.3% this past 3 months, well below the CPI of 2.7%; what does this mean? A dangerous shrink in consumer purchasing power, the same lifeblood needed to spur profits for businesses of the United Kingdom. Some of this negative news is drowned out by a steady increase in retail sales and a healthy housing market, however the Bank of England doesn't buy it. Last month their meetings certainly point to the fear of investors entering the British investment; the not-so-subtle hint of "inflation hitting 3 percent is expected" hints 'yea we're definitely not raising interest rates'.
WHAT TO WATCH
GBP Purchasing Manager Index Manufacturing
GBP Net Consumer Credit
GBP Purchasing Manager Index Construction
GBP Purchasing Manager Index Services
GBP Lloyds Employment Confidence
GBP Bank of England Rate Decision
GBP Bank of England Asset Purchase Target
The Pound Sterling has room to fall to around 1.50; if it drops down to that level before Wednesday it might correct upwards a bit. Save for left-field Bank of England Rate Decision (ex. rates go boom!) it will certainly drop (also not to forget positive American news adds downward pressure).
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