Sterling steady after retail sales miss

© Reuters. FILE PHOTO: Some of the artwork details are seen on a large scale sample of the new twenty pound note during the launch event at the Turner Contemporary gallery in Margate, Britain, October 10, 2019. Leon Neal/Pool via REUTERS

LONDON (Reuters) – The British pound edged lower against both the U.S. dollar and euro on Friday after consumer morale fell to its lowest level in 16 months and an unexpected decline in retail sales.

The Office for National Statistics said February retail sales volumes were down by 0.3% from January as stormy weather deterred some shoppers from venturing out.

Meanwhile, a survey by GfK showed British consumer confidence fell to its lowest level since November 2020 in March because of inflation worries, high interest rates and the war in Ukraine.

The pound gradually slipped against the dollar to trade 0.1% lower at $1.3174.

Against the euro, sterling fell as much as 0.3% to 83.68 pence, its weakest level against the single currency since Monday, before staging a slight recovery.

“Sterling’s limited reaction to the data is indicative of the limited volatility in the pair around current levels,” analysts at Monex Europe said, highlighting that volatility had “dried up” following Wednesday’s budget announcement.

On Wednesday, British finance minister Rishi Sunak announced a cut to fuel duty and softened some of a looming payroll tax as he sought to alleaviate a severe cost-of-living squeeze against the backdrop of slowing economic growth.