Yahoo Finance Breaking: U.K. Retail Sales Disappoint; Sterling Weakens
U.K. retail sales disappointed again in December dropping 0.6%, adding further force to arguments for an interest rate cut from the Bank of England at the end of the month.
November sales were also revised down to a drop of 0.8% from an originally reported 0.6%.
Total retail sales were up 0.9% over the year in the reported month, a lot weaker than the 2.6% gain expected.
Sterling fell in response, with GBP/USD trading at $1.3066 at 4:30 AM ET (09:30 GMT), down from $1.3100 before the release. EUR/GBP traded at 0.8518, up from 0.8506.
The British Retail Consortium earlier January pointed to the high street suffering the first annual sales decline since 1995. Many retailers, including big high-street names such as John Lewis and Marks and Spencer (LON:MKS), have struggled as political instability and worries over Brexit weighed on consumer confidence.
Traders are pricing in around a 60% chance of a rate cut from the Bank of England later this month, with a reduction seen as a near certainty in the first half of the year.
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