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Monday 21st of February 2011
June 29, 2005    

CBI retail sales drop send sterling down

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by Brian Turner
CBI retail sales drop send sterling down

Data released by the Confederation of British Industry showed the biggest drop in retail sales in the UK in 22 years, sending sterling down in relation to the US dollar, the euro, the Swiss franc, and the yen on Wednesday.

42 percent of retailers reported a drop in sales against only 23 percent that reported a rise in sales.

Some analysts, however, blame the drop at least in part on exaggerated data from June of last year, when hot weather and the Euro 2004 football championships boosted sales.

These figures brought more talk brought more talk that the Bank of England could begin cutting interest rates in August.

Sterling dropped 0.9 percent to $1.7997, an eight-month low, against the dollar before recovering to $1.8007, while it fell 0.8 percent to £0.6691 in relation to the euro, 0.6 percent against the Swiss franc to SFr2.3113, and 0.2 percent to ¥199.31 in relation to the yen.

The yen, meanwhile, lost 0.7 percent in relation to the US dollar, to ¥110.65 before recovering slightly to ¥110.27 on weak US economic data.

While in the US GDP growth was revised upward to 3.8 percent, the core personal consumption expenditure, which the Federal Reserve prefers as a measure of inflation, was revised downward to 2 percent.

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