British retail sales data was the most significant domestic news out today, given its insight into
consumer spending which accounts for the majority of our economy. The volume of sales including
petrol increased 0.9% from December, way ahead of the anticipated 0.4% fall. This monthly figure
meant that sales rose 2.0% over the last year, compared with expectations of a 0.4% gain, and gave
support to the idea that the UK has had a relatively good start to the year economically.
A meeting in Italy between the German Chancellor Angela Merkel and her Italian counterpart Mario
Monti was cancelled today as Mrs Merkel had to deal with domestic political issues; the German
President Christian Wulff resigning amid corruption allegations. Eurozone officials stated that
the “finishing touches” were being made to the Greek bailout deal, and that all being well it should
be finalised on Monday. It was not surprising however that the market took the comments with
a pinch of salt, commentators highlighting that such promises have been persistently made, and
broken, for the last few weeks. There is also a growing realisation that the 120% Greek debt to GDP
target by 2020 is looking untenable and that the figure is likely to be closer to 130%.
Volumes were once again weak as investors remained in wait and see mode ahead of the suggested
Monday deadline. The FTSE 100 maintained a level around the 5900 mark throughout the day,
eventually finishing off its highs at 5905, around 0.33% better off for the day.