UK Retail Sales rise 0.5% MoM in August vs. 0.4% expected
The United Kingdom (UK) Retail Sales climbed 0.5% month-over-month (MoM) in August after advancing 0.5% in July (revised from 0.6%), according to the latest data published by the Office for National Statistics (ONS) on Friday.
Markets projected a 0.4% rise in the reported month.
The core Retail Sales, stripping the auto motor fuel sales, rose 0.8% MoM in August, compared with the previous rise of 0.4% (revised from 0.5%) and the expected 0.3% growth.
The annual Retail Sales in the UK increased 0.7% in August versus July’s 0.8% revision, above the consensus of 0.6%. The annual core Retail Sales grew 1.2% in the same month versus a 1.0% rise prior (revised from 1.3%). This reading came in better than the market expectations of 0.8%.
Market reaction to the UK Retail Sales report
The upbeat UK Retail Sales report fails to boost the Pound Sterling. The GBP/USD pair is trading 0.19% lower on the day at 1.3530 as of writing.
Pound Sterling Price Last 7 Days
The table below shows the percentage change of British Pound (GBP) against listed major currencies last 7 days. British Pound was the weakest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.31% | 0.34% | 0.19% | -0.19% | 0.96% | 1.91% | -0.28% | |
| EUR | 0.31% | 0.65% | 0.49% | 0.14% | 1.29% | 2.23% | 0.04% | |
| GBP | -0.34% | -0.65% | -0.14% | -0.52% | 0.61% | 1.58% | -0.60% | |
| JPY | -0.19% | -0.49% | 0.14% | -0.38% | 0.76% | 1.66% | -0.53% | |
| CAD | 0.19% | -0.14% | 0.52% | 0.38% | 1.19% | 2.12% | -0.09% | |
| AUD | -0.96% | -1.29% | -0.61% | -0.76% | -1.19% | 0.97% | -1.25% | |
| NZD | -1.91% | -2.23% | -1.58% | -1.66% | -2.12% | -0.97% | -2.15% | |
| CHF | 0.28% | -0.04% | 0.60% | 0.53% | 0.09% | 1.25% | 2.15% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
This section was published on September 19 at 04.17 GMT as a preview of the UK Retail Sales release.
The UK Retail Sales Overview
The United Kingdom (UK) docket has the Retail Sales data to be released by the Office for National Statistics (ONS) on Friday, later this session at 06:00 GMT.
UK Retail Sales are expected to increase by 0.4% month-over-month (MoM) in August, compared to a 0.6% increase seen in July. On an annualized basis, Retail Sales are seen rising 0.6% during the reported month, down from 1.1% prior.
Core Retail Sales, stripping the basket of motor fuel sales, are anticipated to have climbed by 0.3% MoM and by 0.8% year-over-year (YoY), lower than the previous readings of 0.5% and 1.3%, respectively.
How could the UK Retail Sales affect GBP/USD?
Upcoming UK Retail Sales data could weigh on the GBP/USD pair amid signs of softer consumer spending. The Pound Sterling is already facing challenges after the Bank of England (BoE) decided to keep interest rates steady at 4%, as expected, with a 7-2 majority.
The GBP/USD pair holds ground near 1.3550 after registering more than 0.5% losses in the previous session. However, the pair may further depreciate as the US Dollar (USD) remains stronger after the Federal Reserve (Fed) delivered an expected rate cut on Wednesday but signaled no rush to lower borrowing costs quickly in the coming months.
Technically, the GBP/USD pair may target the initial barrier at the nine-day Exponential Moving Average (EMA) of 1.3567. A break above this level could improve the short-term price momentum and support the pair to explore the region around the two-month high at 1.3726. On the downside, the primary support lies at the psychological level of 1.3500, aligned with the 50-day EMA of 1.3496.
Economic Indicator
Retail Sales (MoM)
The Retail Sales data, released by the Office for National Statistics on a monthly basis, measures the volume of sales of goods by retailers in Great Britain directly to end customers. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Next release: Fri Sep 19, 2025 06:00
Frequency: Monthly
Consensus: 0.4%
Previous: 0.6%
Source: Office for National Statistics
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
