Updated UK inflation data for April was disappointing, following the timing of Easter, which impacted air fares and consequently, inflation. Whilst inflation fell to 2.4%, soft drink prices did increase after introduction of the new sugar tax. Sterling also depreciated after this inflation news. Despite this fall in inflation, UK retail sales increased in April after a poor month for March, suggesting the economy is not as unhealthy as it may seem given the data for the first quarter. Retail sales for April rose by 1.6% on those for March, but consumer confidence remains low, with a key measure reported to have decreased in April.
As the news of Brexit has been more subdued recently, Mark Carney, the Governor of the Bank of England, has been weighing in with a warning that a disruptive Brexit could have big implications for the economies of both the UK and European Union as inflation could crawl higher. Carney has stated that Brexit has already cost the UK 2% in economic growth, with household incomes £900 a year worse off than had the outcome been to remain in the EU.
President Donald Trump has cancelled his summit with Kim Jong Un, North Korea’s leader, on the 12th June in Singapore, following the North’s statement last week. The North has responded explaining they are open to talk to Donald and the US as anytime. Whilst this is disappointing for the US, the Korean peninsula and the planet as a whole, it cannot be seen to be unexpected given the volatility of their relationship. North Korean officials are expected to travel to the US this week. Following this news, Asian equities, in particular South Korean equities, suffered a small loss with the major Asia indices reporting decreases.