GBP: Retail sales surprise on the upside – ING

UK retail sales surprise on the upside, ING's FX analyst Chris Turner notes.

US tariffs are a EUR/GBP negative

"Our UK economist, James Smith, writes: 'Another decent month for UK retail saw sales up 1%, having risen 1.4% last month (these are volume figures, so inflation adjusted)." 

"It's unusual to have two such strong months in a row, given this is a volatile data set – though it was equally strange to see four consecutive falls through the final months of 2024, given real-wage growth is so strong in the UK (6% wage growth, 2-3% inflation). So I think what we're seeing is a catch-up in the data to the probable underlying trend."

"Sterling has strengthened a little further on today's retail sales figures. 0.8320 is clear support, below which it looks biased towards 0.8250. Next week will be dominated by the tariff story, and tariffs are EUR/GBP negative."