Pound Sterling Dented by UK Retail Sales Retreat
UK retail sales stumbled in July after a strong summer start, causing modest losses for the Pound Sterling against major currencies. The data showed a 0.5% month-on-month decline in volumes including fuel, matching the consensus forecast but undershooting expectations on underlying sales excluding fuel.
The softer detail came from revisions and an unfavourable base effect, which pushed annual retail growth down to 1.6% from 3.8%, according to Lloyds. However, economists at Pantheon Macroeconomics noted that the trend remains solidly up, with sales growth averaging around 2.6% annualised so far this year.
Despite the weak July data, consumer confidence jumped in August, with the GfK index rising to -14 from -17, its strongest reading in two years. However, Pantheon suspects that this improvement may prove temporary and driven by improving confidence among under-50s.