- Office for National Statistics
It seems that Mario Draghi's announcement provided a long-term, strong bullish bias for the Sterling, as even disappointing statistics from the domestic economy had almost no impact on the cable. After penetrating 1.68-mark on Thursday, the cable was trading sideways on Friday.
First report from the ONS showed that trade gap widened more than originally was expected in April, as exports disappointed. The difference between exports and imports stood at minus 8.9 billion pounds in the fourth month, following March's deficit of 8.3 billion and falling short of analysts' expectations for a 8.7 billion gap. A 1.5% slowdown in exports was caused by the decline in demand for medical in pharmaceutical, while imports climbed 0.8% over the corresponding period. A drop in exports is adding to signs the long-term sustainable outlook remains tough, because companies and their sales abroad is a key factor in boosting growth.
Another worrying sign, is a continuous decline in inflation expectations. The central bank said respondents gave a median answer of 2.9% inflation, compared with 3.5% in the previous survey, bringing the indicator to its two-year low. Despite the slowdown, the central bank expected the CPI to remain well anchored in the medium-term.
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