July UK retail sales fell 0.5% month-over-month, missing estimates and weighing on the British Pound against the Euro.
The EUR/GBP pair climbed to 0.8570 in early European trading after UK retail sales data disappointed. July sales volumes declined 0.5% month-over-month, the first drop since April, against a consensus forecast of a 0.5% fall. June’s gain was revised down to 0.7% from 1.0%.
Annual retail sales rose 1.6% in July, below the 2.2% expected and down from a revised 3.8% in June. Core sales, excluding fuel, fell 0.9% month-over-month, matching the prior month’s decline but worse than the 0.5% drop forecast.
The weaker data prompted modest selling of the GBP. Markets now see the Bank of England holding rates at 3.75% for the rest of the year, while the ECB is expected to hike by 25 basis points to 2.50% at its next meeting.