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British Retail Sales Rise Less Than Expected in August, Weakening Sterling

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Sterling Weakens as UK Retail Sales Fall Short of Expectations

Sterling weakened against the dollar on Friday, reaching a session low of $1.2269, following the release of data that showed retail sales in Britain rose less than expected in August. Figures revealed that British retail sales were only 0.4% higher than the rain-hit month of July, falling short of the 0.5% increase predicted by economists polled by Reuters.

This news caused a slight dip in the pound’s value, with the currency steadying at $1.2278 by 0612 GMT, down 0.1%. Against the euro, it remained relatively unchanged at 86.74 pence per euro.

The pound had already experienced a decline on Thursday, hitting its lowest level since March against the dollar at $1.22305. This drop occurred after the Bank of England made the decision to keep interest rates steady. However, the currency managed to recover slightly later in the session.

The latest data on retail sales indicates a slight slowdown in the UK economy, as consumer spending appears to have been impacted by the adverse weather conditions experienced in July. Despite the modest increase in August, the figures were below expectations, which has raised concerns about the health of the UK retail sector.

Experts believe that the uncertainty surrounding Brexit negotiations may also be influencing consumer behavior and contributing to the cautiousness in spending. The ongoing uncertainty has created a sense of unease, with consumers becoming more hesitant to make major purchases or invest in non-essential goods and services.

While the dip in the pound’s value may be concerning for some, it can also be seen as a welcome boost for British exporters. A weaker pound makes British products more competitive on the international market, potentially benefiting businesses that rely on overseas trade.

It remains to be seen whether this slight decline in retail sales is a temporary blip or a sign of a more significant slowdown in the UK economy. The Bank of England will continue to closely monitor the situation and assess whether any further action is necessary to support economic growth.

Overall, the latest data on retail sales highlights the challenges faced by the UK economy, particularly in relation to consumer spending. As Brexit negotiations continue to unfold, it is likely that businesses and consumers alike will closely monitor economic indicators to gauge the impact of the ongoing uncertainty.

More detail via Daily Mail Online here… ( Image via Daily Mail Online )

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