UK Retail Sales data for October released earlier beat expectations as the figures Including autos and fuel came in at 0.8%, 1% higher than September. However, the big surprise was excluding autos and fuel, as month on month numbers came in at 1.6% when only 0.6% was expected, 2.2% above September number. This was the first positive retail sales report in six months and will go some way to reassure policy makers at the BoE that the consumer and household spending remains resilient. The biggest rises were in toys, sporting goods and clothing as shops that do not sell food reported an increase in sales of 4.2%. Unsurprisingly, fuel sales had a big fall, down 6.4% on the month, as sales returned to more normal levels after the panic buying seen earlier in the year.
The market continues to price in a rate hike from the BoE next month taking the rate up 0.15bp to 0.25%, which given recent data on inflation, employment and consumer attitudes does seem to be on the cards especially as purchase intentions for major items into the holiday season continue to be strong. This would make the BoE the first of the major central banks to raise rates since the beginning of the pandemic. However, the 'unreliable boyfriend' could have other ideas.
This time next week we should know whether the current Fed Chair Jerome Powell has kept the job or whether the leader of the free world has given the reins to Federal Reserve Governor Lael Brainard. Out of the two, Brainard is seen as the more dovish, meaning the Fed would take longer to raise rates or tighten fiscal policy. Up until recently it was a given that Powell would be renominated for the job, however Biden has put the cat amongst the pigeons somewhat by interviewing both candidates over the last few weeks.
Biden has been at pains to sit on the fence when asked about his view as to who is the front runner. What has not helped Powell was the news that both Fed President’s Rosengren and Kaplan actively traded in stocks and other assets while the central bank was desperately trying to shore up financial markets when the world economy was in the eye of the Covid storm. Both announced their resignations soon after.
The decision should be made by Thanksgiving next Thursday.
Lastly, earlier this week whilst watching TV I saw an advert for Bowmore whiskey that has a partnership with Aston Martin. The top of the range is the Black Bowmore DB5 1964. There will only be 27 bottles produced, 25 of which have gone on sale. It was always going to be expensive, but really?! Have a guess …. I'll help you, think of a number and double it. The answer is below along with what I think is the best-looking car ever made. The Aston Martin DB5 is the second best.
A bottle of Black Bowmore DB5 1964 will set you back £50,000. As for the best-looking car ever made, it is of course the Jaguar E-Type. That’s non-negotiable. Even Enzo Ferrari once said that the E-Type is the most beautiful car in the world, and he knew a thing or two about stunning cars.