UK Consumer Confidence Lifts Sterling Amid Revised Retail Figures

The pound rose after UK consumer spending surged unexpectedly in January, following revised figures showing weaker performance in the crucial December period. Retail sales increased by 1.7%, surpassing forecasts, while December's data was revised to show a decline. Sterling reached its highest in two months at $1.2675.

The pound edged higher on Friday following a surprise boost in UK consumer spending for January, which sharply surpassed market forecasts. According to the Office for National Statistics, retail sales grew by 1.7% in January, contrasting with predictions of a mere 0.3% increase.

However, the upbeat January data came alongside revised figures for December, which painted a less optimistic picture of the critical holiday shopping month. December's sales were adjusted to a 0.6% drop from an initially reported 0.3% fall.

In currency markets, sterling rose 0.1% to $1.2675, marking its strongest position in two months, while the euro depreciated slightly against the pound, falling to 82.81 pence.