UK retail sales rose 1.2% in May, beating forecasts, but higher-than-expected government borrowing capped GBP gains against EUR.
The Euro trimmed losses against the British Pound on Friday, with EUR/GBP trading at 0.8670 after UK retail sales data exceeded expectations. Sales climbed 1.2% in May, more than double the forecasted 0.5%, following a 1% decline in April.
However, public sector net borrowing rose to GBP 23.29 billion in May, up from GBP 23.03 billion in April and well above the GBP 18.5 billion expected. The unexpected fiscal strain offset some of the positive impact from retail sales.
German producer prices also slowed, with annual factory-gate inflation at 2.2% in May, below the 2.5% forecast. The Bank of England held rates steady at 3.75% on Thursday but signaled inflation concerns.