UK retail sales jump 2.9% in May, August BoE rate cut less likely

On Thursday June 20, the Bank of England maintained its interest rates at 5.25%. Bank of England Governor Andrew Bailey said:

“It is good news that inflation has returned to our 2% target. We need to be sure that inflation will remain low, and that is why we have decided to keep rates at 5.25% for now.”

FX Empire author and senior editorial team member James Hyerczyk reacted to the BoE’s monetary policy decision by saying:

“The policy minutes revealed the decision to hold rates was “finely balanced” for some MPC members, who noted moderate but still high wage growth and services inflation since May.

However, upcoming UK inflation and labor market data could impact sentiment for a BoE rate cut in August or September. Steady wage growth and persistent inflation could delay the BoE rate cut until November.

GBP/USD reaction to UK retail sales figures

Ahead of UK retail sales data, 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, GBP/USD fell to a low of $1.26613 before reaching a high of $1.26738.

On Friday, June 21, GBP/USD was up 0.09% at $1.26686.