Pound slides on weak retail data

AFP - Thursday, July 24 05:29 pm

LONDON (AFP) - The pound extended earlier losses Thursday as it fell prey to weak data, this time on the state of UK retail sales which suffered a massive slump in June.

Retail sales in the UK plunged in June by their biggest amount since records began in 1986 but inflationary pressures, particularly within food, continue to mount, official figures showed.

The office for National Statistics said retail sales in June dropped by 3.9 percent, more than reversing the upwardly-adjusted 3.6 percent increase recorded for May.

The scale of the reversal was bigger than anticipated. Analysts polled by Thomson Financial News were expecting a 3.0 percent decline.

The pound fell to a 10-day low of $1.9816 against the dollar, after trading at around $1.9880 ahead of the data. At 15:30 GMT, the pound was trading at $1.9829. The euro, meanwhile, was trading at 0.7899 pounds, having risen to a high of 0.7906 pounds.

"Sterling has weakened on the bigger than expected drop in retail sales," said Daragh Maher at Calyon.

"We continue to expect no change in UK rates before year end, and think that the gloomy news on the UK economy is likely to persist, keeping sterling on the back foot," he said.

STERLING

London

16:58 BST

Weds close

US dollar

1.9835

down from

1.9974

Euro

1.2666

down from

1.2732

Yen

213.45

down from

215.54

Swiss franc

2.0609

down from

2.0740

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