Sterling rises after UK retail sales beat forecasts

Retail sales rose by 0.7% in June from May, topping forecasts for an increase of 0.2%, while year-on-year, they fell 1.0%, compared with expectations for a decline of 1.5%, according to official data. Sterling rose by as much as 0.28% to a session high of $1.2904 after the figures. That data had prompted traders to pare back their expectations for UK rates to rise to as much as 6%.

The pound bounced on Friday after data showed UK consumer spending was stronger than expected in June, in spite of high inflation, as wage growth picked up, supporting the case for more rate rises from the Bank of England this year. Retail sales rose by 0.7% in June from May, topping forecasts for an increase of 0.2%, while year-on-year, they fell 1.0%, compared with expectations for a decline of 1.5%, according to official data.

Sterling rose by as much as 0.28% to a session high of $1.2904 after the figures. It was last up 0.2%. The pound was still heading for its largest weekly loss against the dollar since January, after separate data earlier this week showed British inflation cooled far quicker than forecast last month. That data had prompted traders to pare back their expectations for UK rates to rise to as much as 6%.