No important events are expected today.

Retail sales in Britain have been declining for the second consecutive month, which confirms my hypothesis that stagflation is approaching. The population of the United Kingdom is facing a massive increase in inflation, which leads to a reduction in purchases in stores. For two months in a row, the decline in retail sales exceeded the mark of 4.6% (y/y). The last time this situation was observed was in 2020, when the first wave of the coronavirus pandemic was in full swing.

But then the decline in retail trade was logical against the backdrop of a nationwide lockdown, and now all stores are open, and the British are facing much more negative consequences of high inflation. Since the Bank of England expects inflation to peak only in October, the negative trend in retail trade will gain momentum. For the British economy, this is a negative scenario, since the lion’s share of GDP comes from consumer spending, and retail trade is part of this spending.

Recommendations: Sell 1.2299/1.2325 with TP 1.2222.