The pound takes a bath after 'terrible' UK retail sales numbers
- June retail sales came in at -0.5%, versus analysts forecasts of 0.4% growth.
- The underperformance, coupled with bad data earlier in the week, means an interest rate hike from the Bank of England next month now looks less likely.
- As a result, the pound is falling. It dipped below $1.30 but is now back at that level.
LONDON - The pound sterling fell against the dollar on Thursday morning after UK retail sales data seriously undershot analyst forecasts.
The Office for National Statistics said on Thursday that retail sales in June grew 2.9% on an annual basis, well under economists' forecasts of 3.9%. Month-on-month growth turned negative, with sales shrinking by 0.5% between May and June. Economists had expected growth of 0.4%.
The pound dipped sharply against the dollar in the immediate aftermath, dropping below $1.30. It has since recovered and is trading down 0.37% against the dollar at $1.30 as of 9.50 a.m. BST (4.50 a.m. ET).
Neil Wilson, the chief market analyst for Markets.com, said in an email: "That was a terrible set of retail sales figures which will do nothing to persuade the Bank of England to hike in August. Combined with the disappointing CPI reading it suggests the MPC would be well advised to row back on plans to raise rates, a fact that seems to have been reflected by traders' bets on sterling this morning."