Sterling in the wars

Wooden spoon
The Guardian reports that 95% of the Christmas puddings sold by British supermarkets are made by Matthew Walker. He makes 26 million of them annually at his secretive facility in Heanor, Derbyshire, dominating the global Christmas pudding market. Mr Walker also pays UK tax, unlike some well-known firms.

Netflix and Cadbury are the companies reported most recently to have avoided paying tax to the chancellor of the exchequer last year but there are others too. And if the chancellor cannot collect tax from the corporations he must either spend less or borrow more. Yesterday's data showed him borrowing more than analysts had forecast in November; £13.6bn instead of $11bn. In his budget he allowed himself £73.5bn of net borrowings in the current financial year. He has already drawn down a total of £66.9, leaving himself with just £1.7bn a month to manage on until April.

Investors were not impressed. Even before the public sector borrowing figures had come out they were inclined to lean on the pound. And when they saw the numbers they increased the pressure. Sterling had another difficult day, falling by an average of -0.5% against the other dozen most actively-traded currencies. Once again it couldn't quite claim the wooden spoon but beating the South African rand is hardly a stellar achievement these days.

Krona leads the way
For second day the Swedish krona was at the head of the pack. It strengthened by 1% against the struggling pound, helped on its way by better-than-expected Swedish retail sales data. The Norwegian krone shared second place with the Swiss franc.

Swedish retail sales increased by 0.4% in November, leaving the annual pace of growth at a useful 5.2%. Investors were ready to overlook the slight narrowing of Switzerland's trade surplus, perhaps because any surplus at all is impressive when the currency is so strong.

America's gross domestic product data were roughly in line with the annualised growth of 2.1% shown in earlier data for the third quarter. At 2.0% the expansion was equivalent to quarterly growth of 0.5%: It would still have been 0.5% if the figure had been left at 2.1%.

European gross domestic product
France has already announced this morning that its economy expanded by 0.3% in Q3. The UK figure at half past nine is forecast to confirm growth of 0.5%. The important number after lunch will be the unpredictable US durable goods orders.

There are also US data for personal income and spending, consumer confidence and new home sales after lunch but it is the durable goods orders number that carries the most clout. A monthly decline of -0.7% is forecast, with an increase of 0.1% when transportation items have been stripped out. Canadian retail sales come out at the same time.

The pound has been looking a little perkier overnight than it did yesterday morning. A GDP figure that meets expectations could help it regain more ground. But woe betide sterling if the GDP data disappoint.