UK Retail Sales Surge 2.9% in May, BoE Rate Cut in August Less Likely
On Thursday, June 20, the Bank of England held interest rates at 5.25%. Bank of England Governor Andrew Bailey said,
“It’s good news that inflation has returned to our 2% target. We need to be sure that inflation will stay low, and that’s why we’ve decided to hold rates at 5.25% for now.”
FX Empire author and senior editorial team member James Hyerczyk reacted to the BoE monetary policy decision, saying,
“The policy minutes revealed that the decision to hold rates was “finely balanced” for some MPC members, who noted moderating but still high wage growth and services inflation since May.”
Nevertheless, the next round of UK inflation and labor market data could impact sentiment toward an August or September BoE rate cut. Steady wage growth and sticky inflation may delay the timing of a BoE rate cut to November.
GBP/USD Reaction to the UK Retail Sales Numbers
Before the UK retail sales data, the GBP/USD fell to a low of $1.26506 before climbing to a high of $1.26654.
However, in response to the retail sales report, the GBP/USD fell to a low of $1.26613 before striking a high of $1.26738.
On Friday, June 21, the GBP/USD was up 0.09% to $1.26686.
