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19/07/24
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GBP Inches Down After Soft Retail Sales
On Friday, the British pound was slightly lower, and GBP/USD traded at about 1.2922, down 0.17% for the day in the North American session. The pound has done well in July but has hit an obstacle and on Thursday dropped by 0.50%. It extended those losses today.
In June, retail sales in the UK suffered a turnaround and fell 1.2% m/m after May’s strong gain of 2.9%. This was lower than the market estimate of -0.4%. After a revised 1.7% gain in May, retail sales fell 0.2% annually. This was lower than the market estimate of a gain of 0.2%.
Inclement weather was once again blamed as it kept shoppers away from stores. Wet weather in April was blamed for the weak retail sales report and the unusually cool weather in June, together with uncertainty before the July 4 election were blamed for a decline in retail sales in June.
Consumers are reluctant to spend despite inflation dropping to 2% and a wage increase. Consumers have been hit hard by high interest rates and inflationary pressures and confidence in the economy has been very weak.
Friday’s GfK consumer confidence index, however, edged up to -13 for July, a notch higher than June’s -13 and the highest level since Sept. 2021.
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