High street struggles drag sterling down to $1.30

The pound has been dragged down to $1.30 by declining high street footfall and the financial woes of a slew of retail brands.

An increase in retail sales of 0.2% had been predicted by the Office for National Statistics (ONS), however statisticians were surprised by a fall of 0.5% in June.

It is thought that while the World Cup brought consumers to pubs and restaurants in droves, it also kept them off the high street. Supermarkets also saw increased footfall during the World Cup, with food sales enjoying a 0.1% increase during June, following previous large increases in April and May.

Weak retail figures have cast doubt over whether interest rates will rise next month, and sterling’s fall of 0.7% against the dollar puts it at its lowest value since September

Bank of England interest rates were due to rise in August, but inflation rates released earlier this week divided economists on whether it would do so.

Figures released by the ONS also showed a rise in retail sales in the year up to June of 2.9%, showing a decline on the 4.1% annual increase recorded in May, sales are also below forecasts of a 3.5% rise.

ONS senior statistician, Rhian Murphy, said: “Retail sales grew strongly across the three months to June 2018 as the warm weather encouraged shoppers to buy food and drink for their BBQs.

“However, in June retail sales actually fell back slightly, with continued growth in food sales offset by declining spending in many other shops as consumers stayed away from stores and instead enjoyed the World Cup and the heatwave.”