UK retail sales help consolidate GBP gains this week

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Written by Dan Waterman
May 23rd 2025
The sunniest April on record sees UK consumers spend at the fastest pace since July 2021..

UK retail sales rose 1.2% in April after flat-lining in March (0.1%). The expectation was just 0.2% and so this is a surprising and welcome result. As a services nation, consumers are required to spend money to stimulate the economy and so retail sales are a key data point for the UK/£.

This week has seen a trio of 'beats' for the UK and so underpin expectations of just one more interest rate cut this year (good news for GBP). Inflation went higher than expected (bad), retail sales jumped as mentioned above and yesterday PMI for May also beat expectations (good).

A 49.4 reading isn't a good one (contraction), but much better than last's months 48.5 (50 is growth). The EU had an opportunity to build upon a bumper 50.4 result last time out, but instead fell unexpectedly to 49.5 (50.7 was anticipated).

This has seen the Euro softer and the Pound strengthen across the board. £-€ is up marginally on the week (0.2%) and £-$ continues its out-performance at a 3-year high, gaining 1.5%.