The British pound tumbled sharply against the dollar and the euro as well as against other major counterparts on Wednesday after disappointing UK data that highlighted weakness in the British economy despite some recent upbeat data.
According to data from the UK Office for National Statistics, retail sales fell at the fastest rate in a year in April by 1.3 percent, compared with a year earlier, when sales edged up 0.5 percent. Both readings much weaker than forecast by economists.
The data included sales of automotive fuel.
A factor contributing to the decline of overall retail sales was a drop in sales of food, which plunged 4.1 percent from March, the worst showing in almost two years.
It is now evident that British households are struggling as price rises outstrip household income and sharp government benefit cuts are going to start affecting sales.
Consumer spending, which drives 60 percent of Britain’s gross domestic product, remains fragile after years of below-inflation wage growth and government austerity measures.
There was little good news on Britain’s finances either.
Net public borrowing came in at 8.035 billion pounds in April, the first month of the 2013-14 fiscal year. That was the highest reading for a month of April on record.
GBPUSD fell to $1.5018 in late US session trading, down from the day high of $1.5172. EURGBP peaked at 0.8589 from where it began the trading day at 0.8515.