Already released this morning, Pound Sterling has been boosted by strong retail sales figures. The above consensus retail sales reading showed the total value of sales by retailers in the UK rose by 2.9 percent in May (forecasted 1.5 percent).
Retail sales jumped 1.3 percent year-on-year in May, showing a significant rise from the -0.9 percent figure markets expected.
The ONS said retail sales improved in all sectors – supported by the two bank holidays in May and the hotter weather enticing UK consumers to spend.
Yesterday, Pound Sterling marginally dropped against the Euro and Dollar following the Bank of England monetary policy decision. Inflation has returned to the Bank’s target of 2 percent. However, ‘Andrew Bailey’ Governor of the Bank of England highlighted for inflation to remain low, the interest rate level needs to remain at 5.25 percent.
The Monetary Policy committee voted by majority of 7-2 to keep rates unchanged at 5.25%. Markets are now anticipating a 25-basis point rate cut in August, although the retail sales release earlier this morning will show signs of support for the UK economy.