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Pound drops by most this month on very soft retail sales

GBPUSD News by Allie Longford on 06:05 February 17, 2017 EST

Retail sales unexpectedly fell for a third month in January. Sales dropped 0.3 percent, following a 2.1 percent plunge in December, the Office for National Statistics said on Friday. Market expected a 1 percent increase.

The ONS said the data indicated the first signs of a fall in the underlying trend since December 2013.

Year on year, sales were up 1.5%, the weakest performance since November 2013.

Prices at the pump jumped 16.1% in January, the biggest changed since September 2011. Kate Davies, ONS senior statistician noticed that "We have seen falls in month-on-month seasonally adjusted retail sales, both in conventional stores and online, and the evidence suggests that increased prices in fuel and food are significant factors in this slowdown".

The pound has lost 100 pips within minutes of the news release and trades at 1.24 and probably lower as the trading day continues. Evidence suggested higher fuel and food prices were key factors it added.






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