Sterling weakens as effect of strong retail figures fade

Sterling was back on the defensive against the euro this morning as the "feel good" effect of surprisingly strong retail sales figures started to fade, with little change seen to UK monetary policy outlook.

The pound rallied on Thursday after figures showing UK retail sales surged 3.5% last month, the fastest pace since the series began in
1986,putting them up 8.1% on the year.

The startling data, which also boosted British retail shares, fanned talk that the B of E might have scope to raise interest rates from the current 5%.

Sterling also brushed off an announcement by the UK Treasury on Thursday that B of E chief economist Charlie Bean would take the role of deputy governor for monetary policy, replacing Rachel Lomax when she steps down at the end of the month.

Right now Interbank is at 1.2666 with Natwest offering 1.2044.

source: IFX