Pound Sterling Price News and Forecast: GBP remains vulnerable on weak UK Retail Sales data
|GBP/USD dips as Retail Sales slide
The markets were expecting a letdown from December retail sales after a strong November reading, but nobody was expecting a multi-year drop. Yet that’s what happened, as retail sales plunged 3.2% m/m, the lowest level since January 2021. Considering the sharp drop, the British pound’s reaction has been muted.
In November, retail sales jumped a revised 1.4%, as shoppers flocked to department stores to take advantage of Black Friday sales and other discounts. This meant that much of the Christmas shopping took place in November. The massive drop of 3.2% crushed the consensus estimate of -0.5%. Read more...
Pound Sterling remains vulnerable on weak UK Retail Sales data
The Pound Sterling (GBP) falls sharply as the United Kingdom Office of National Statistics (ONS) reports downbeat Retail Sales data for December. UK household spending contracted significantly as individuals faced the heavy burden of higher interest rates and consumer price inflation, which deepened the cost-of-living crisis. A sharp decline in high street sales would have been expected to ease pressure on the stubbornly high inflation outlook but in the end it was insufficient to move the needle.
A significant contraction in the Retail Sales could have increased the odds of an early rate cut by the Bank of England (BoE). In spite of a significant fall in the UK consumer spending, however, BoE policymakers are expected to maintain a restrictive monetary policy stance until they are convinced that the underlying inflation will return to a 2% target in a timely and sustainable manner. Read more...
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