GBP relatively unchanged after retail sales data

The Pound experienced a dip following the release of the latest UK retail sales data but quickly rebounded, before settling back at levels pre data release.

Analysts believed the data had been skewed by an early Easter and adverse weather during the month, maintaining optimism that overall spending trends were more favorable.

Sterling traded relatively unchanged against the Euro, at just below 1.1740, while against the US Dollar, Sterling stayed just under 1.2700, influenced by the stronger dollar tone.

The ONS reported a 2.3% drop in UK retail sales volumes for April, significantly worse than the consensus forecast of a 0.5% decline. Additionally, the March figure was revised to show a 0.2% decrease, compared to the initial estimate of no change.

Sales still rose by 0.7% in the three months leading up to April 2024 compared to the previous three months, despite a 2.7% decline in volumes over the year. Underlying retail sales recorded a 2.0% decline, following a revised 0.6% decrease previously.

According to the ONS, clothing retailers, sports equipment stores, games and toys shops, and furniture stores all underperformed due to reduced footfall caused by poor weather.

Non-food store sales volumes dropped by 4.1% in April, marking the largest monthly decline since 2021. Additionally, there was a significant decrease in fuel sales during the month.

‍