Pound Slumps to Seven-Week Lows Despite Strong UK Retail Sales

The British Pound (GBP) has struggled to make gains despite strong UK Retail Sales data released on Friday, trading at seven-week lows against the US Dollar (USD). The GBP/USD pair remains flat around 1.3365, on track for a 1.15% weekly decline.

The divergence in monetary policy decisions between the Federal Reserve (Fed) and the Bank of England (BoE) has weighed heavily on the Pound this week. While the BoE left its Bank Rate steady at 3.75%, three committee members called for a rate hike, similar to July's meeting.

BoE Governor Andrew Bailey hinted that monetary policy might need to be tightened further due to rising inflation concerns and potential second-round effects from ongoing global conflicts.

Strategists at UOB Group note that the Pound remains vulnerable below 1.3435, while also observing that conditions are oversold. They see a breach of this level as a sign that the GBP's weakness is stabilizing.