The latest retail sales data out of the United Kingdom has disappointed analysts and the pound is heading lower as a result. Concerns that the Bank of England won’t be ready to tighten monetary policy are weighing on the sterling.
Sterling’s recent rally has been halted, thanks to the release of the most recent retail sales data. Even though retail sales increased from June to July, they didn’t increase as much as expected. On top of that, recent earnings data indicates a slower pace than expected, and that is also causing problems for the UK pound.
Better economic performance in recent weeks has prompted speculation that the Bank of England would soon take a more hawkish stance and think about raising interest rates in the near future. This latest economic data, though, could be a case for the BOE, led by Governor Mark Carney, to take a more cautious approach to monetary policy.
The result for the UK pound has been losses to its major counterparts as concerns about future policy weigh.
At 14:02 GMT GBP/USD is lower, heading down to 1.5663 from the open at 1.5680. EUR/GBP is higher, moving up to 0.7123 from the open at 0.7090. GBP/JPY is holding steady at 194.1150, which was the opening quote.
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