The post Pound Sterling tumbles as UK Retail Sales surprisingly declines in December appeared on BitcoinEthereumNews.com.

The Pound Sterling underperforms its major peers as weak UK Retail Sales data strengthens the case for a BoE interest rate cut in February. UK monthly Retail Sales contracted by 0.3% in December despite being expected to grow strongly by 0.4%. The US Dollar strengthens despite a slight acceleration in Fed dovish bets. The Pound Sterling (GBP) falls sharply against its major peers on Friday as the United Kingdom (UK) Office for National Statistics (ONS) reported that Retail Sales surprisingly contracted in December, another data that adds to the weak economic outlook. The Retail Sales data, a key measure of consumer spending, declined by 0.3% month-on-month. Economists expected the consumer spending measure to have risen at a faster pace of 0.4% than 0.2% growth in November. According to the ONS’s Retail Sales report, food store sales volumes fell 1.9% in the month, putting index levels at their lowest since April 2013. The monthly fall was strongest in supermarkets, but sales volumes also fell in specialist food stores (such as butchers and bakers) and alcohol and tobacco stores (including vaping shops). Lower individual spending adds to expectations that the Bank of England (BoE) will be forced to cut interest rates by 25 basis points (bps) to 4.5% in the policy meeting in February. Market speculation that the BoE will reduce borrowing rates next month has already escalated due to cooling inflationary pressures and rising government borrowing costs. The Consumer Price Index (CPI) report for December showed that headline inflation surprisingly decelerated and the core reading grew at a slower-than-projected pace. Meanwhile, surging yields on UK gilts remain the pivotal factor for the need for policy-easing. The 30-year UK gilt yields soared to 5.48%, the highest level seen in over 26 years. UK gilt yields rallied as investors were cautious over the economic outlook due…

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Filed under: News - @ January 17, 2025 8:23 am