UK consumers cut back on spending amid soaring inflation

GBP

Sterling fell to fresh lows against both the euro and US dollar on Friday as the latest Retail Sales data stalled. Consumers cut back on spending amid soaring UK inflation.

According to data released by the Office for National Statistics, Retail Sales fell in August by 1.6% month on month – the biggest decline since December 2021 and increasing fears of a long lasting recession.

Focus will now turn to the Bank of England interest rate decision due on Thursday. Sterling bulls are hopeful the BoE can provide the British currency with a much needed boost through a 75-100 basis points interest rates hike. Should the BoE’s decision underwhelm investors’ expectations with an increase of less than 75 basis points, Sterling will likely be pressured.

Key announcements

18:00 – EUR – ECB President Lagarde’s speech