Annual Inflation up to -0.1% in the Euro Area and in the EU

Eurostat have confirmed that annual inflation in the euro area was minus 0.1% for May, despite the negative figure this was still a slender inflation increase from the minus 0.2% that was recorded in April, for the whole of the European Union (EU) there was an identical pattern in the figures.
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The data will not make for good reading for the European Central Bank, who have released a raft of measures to combat deflation, including a negative bank deposit facilty rate of 0.4%, and an extensive quantitative easing programme that was boosted to 80 billion euros per month in March.

The largest impacts on inflation arrived from a 0.12% rise in prices from restaurants and cafes, plus rents and tobacco costs that climbed upwards by 0.07%, while fuels for transport fell by 0.53%, heating oil by 0.20%, and gas declined by 0.13%.

Sixteen EU member states suffered negative inflation, where the lowest annual inflation rates were found in Romania by a minus 3%, Bulgaria minus 2.5%, and Cyprus 1.9%.

In contrast, the highest inflation levels were found in Belgium, Malta and Sweden, who all saw price increases by 1.6%, 1%, and 0.8% respectively.

UK Retail Sales in Huge Boost

 The retail sector in the UK has increased its sales by a significant 6% for May compared to the same month a year ago, while month on month there was a rise of 0.9% of the quantities bought in the sector.

Shoppers in the UK are seemingly undeterred by the threat of an exit from the EU, as the amount spent in the retail industry increased by 3.1%, compared with May 2015 and increased by 1.3% compared with April.

Quarter on quarter there was also a similar pattern of retail growth, with a 1.5% upswing in the amount of goods bought.

Online sales was a key driver of the sector, as the value of  business conducted over the internet increased by 21.5% in May 2016,  compared with May 2015 and increased by 6.4% compared with last month.

Clothes purchases rose 4.3% in May, as it turned warmer after an unseasonably cold weather snap in April, furthermore department store sales increased by 1.1%.

A major reason  for the apparent surge in consumer confidence, was that average store prices fell by a year on year 2.8% last month, and this included petrol stations, event though oil prices have recovered to over $50 per barrel in recent weeks.

 Pound in Slender US Dollar Recovery

The pound has managed to stop the recent rot in the GBP/USD rate rising to buying just under $1.42 this morning GMT, after falling to below $1.412 in the early hours of yesterday.

This was after the solid employment data that was reported yesterday in the UK where the number of the unemployed dropped by 20,000, plus the Federal Reserve Chair Janet Yellen confirming that US interest rates will remain on hold in June.

With now just a week to go before the crucial EU referendum vote in the UK, the latest poll conducted by Ipsos MORI for the London Evening Standard, revealed that 53% of respondents wish the leave the EU, compared to 47% who want to stay in, excluding all those who are undecided.

It is the first time since these telephone polls began in 2013, that there is a majority for the Leave campaign.