Sterling falls on weak retail sales data
10 January 2008
A raft of weak retail data from the high street has raised fears over the health of the UK economy leading up to the Bank of England interest rate decision later today. Sterling fell to an 11-year low against the Euro; with the value of €1 breaching 75 pence before retracing slightly lower to current levels.
A weaker than expected trading statement from Marks and Spencer released on Wednesday sent retail shares in London plummeting; having their worst days trading in 20 years. The FTSE lost 1.3% and similar concerns were shared in the Eurozone where stock markets also fell.
Rising fuel bills coupled with the lingering credit squeeze have left many consumers with lower disposable incomes, leading to a sharp downturn in consumer spending over the crucial Christmas period. As economic sentiment declines, retailers are putting the Bank of England under increasing pressure to cut rates at 12.00 today.