BLBG:Pound Weakens; Retail Sales Slump Signals Economic Recovery Is Stalling
The pound fell against the dollar for a second day as a report showed retail sales slid in June, fueling speculation the U.K.’s economic recovery is stalling.
Sterling climbed versus the the euro for a third day as the region’s debt crisis worsened. Sales fell by 0.6 percent from a year earlier, following a 2.1 percent decline in May, the British Retail Consortium said today. The median forecast of six economists polled by Bloomberg was for a drop of 1.4 percent. A U.K. housing gauge showed little improvement in June as a “subdued” economic outlook hampered demand for property, the Royal Institution of Chartered Surveyers said.
Britain’s currency fell 0.3 percent to $1.5855 as of 7:51 a.m. in London. It weakened 0.7 percent to 126.73 yen and was 0.3 percent stronger at 87.92 pence per euro.
Sterling has lost 6.3 percent in the past year, the second- biggest decline after the dollar, according to Bloomberg Correlation-Weighted Currency Indexes, which track 10 developed- market currencies. The Swiss franc jumped 15 percent.
The number of real-estate agents and surveyors saying prices fell exceeded those seeing gains by 27 percentage points, compared with 28 percentage points in May, the London-based group said in an e-mailed report today. “Activity levels remain flat and are at relatively depressed levels,” RICS said.
A report today may show inflation stayed at 4.5 percent, the fastest pace since October 2008, according to a separate Bloomberg News survey.
Britain’s legal tender dropped and the country’s bonds rose this year amid speculation that worsening economic growth will limit the Bank of England’s ability to raise rates, while the Federal Reserve ends its quantitative easing program and the European Central Bank tightens its monetary policy.
Gilts have returned investors 1.9 percent since the end of June, compared with a 4.4 percent decline by Italian bonds, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Spanish bonds handed investors a 2.8 percent loss, the indexes show.
To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
