Sterling dipped briefly after disappointing retails sales data from the U.K. Retail sales barely grew in July, signalling a still sluggish British economy as consumer spending declines.
The U.K. Office for National Statistics announced that retail sales excluding fuel rose by just 0.2 percent in July and were 0.2 percent lower than in July 2010. Economists had forecast a 0.3 percent increase for the month and an equal annual increase.
Meanwhile, sales volumes including automotive fuel grew by just 0.2 percent last month, leaving retail sales unchanged from last year’s level.
In an attempt to boost sales, retailers across the country aggressively slashed prices in summer sales but this did little to coerce consumers to spend more. Britons have cut back on spending as soaring prices, higher taxes and slow wage increases eat into their budgets and uncertainty about job security weighs on sentiment.
The British pound fell against most of its counterparts after the news at 08:30 GMT.
GBPUSD spiked down to 1.6502 from the pre-news high of 1.6533 but rebounded quickly. EURGBP fell 0.8742 to 0.8716 where it is currently trading at 30minutes after the news.