Sterling dives after disappointing retail sales data
The pound has dropped below $1.30 following weak data
Sterling was out of favour once again on Thursday after retail sales data disappointed despite food and drink sales receiving a boost from the World Cup.
The pound dropped under $1.30 when official figures showed retail sales were down by 0.5% last month, as compared to May. Economists were predicting sales to rise by 0.2%.
Experts are now divided over whether the Bank of England will opt to raise rates in August.
Data released on Wednesday showed inflation stalled at 2.4% in June, suggesting the Bank of England might choose to hold rates.
The strength of the US dollar contributed to the weakness of the pound, which fell 0.56% at 1.299. Against the euro, sterling dropped 0.25% to 1.119.
“We expected that idiosyncratic factors such as warm weather and the World Cup would provide a boost to retail sales, but today’s out-turn points to some reversal in June after very strong prints in the previous two months,” said Morgan Stanley’s Jacob Nell.
The FTSE 100 rose on Thursday as its European peers dipped into the red.
By the close, the FTSE 100 had climbed 0.1% or 7.69 points to 7,683.97, while the Dax in Germany had fallen 0.70% and France’s Cac 40 was knocked 0.63%.
Oil prices were level with Brent crude at 73.092 US dollars per barrel. Prices have been inching upwards due to Saudi Arabia’s signal that it was reaching the limits of its spare production capacity.
In UK stocks, Royal Mail shares edged up 1.1p to 468.6p after shareholders voted against pay for its new Zurich-based boss.
The directors’ remuneration report was rejected at its annual general meeting on Thursday, with 70% of proxy shareholders voting against the package.
Energy giant SSE has blamed Britain’s heatwave and soaring wholesale gas prices for an earnings hit of around £80 million, knocking shares by 32.5p to 1,352p.
The Big Six supplier – which is merging its energy and supply business with rival Npower -said households used 10% less gas than expected over the first quarter to June 30 as temperatures soared.
Sports Direct’s shares slumped 7.1% or 31.1p to 405p after it took a £85 million hit on its Debenhams stake.
The retailer blamed tough comparatives and the writedown of its stake in the department store chain for dragging full-year profits down 72.5% – to £77.5 million in the year to April 29, from £281.6 million a year earlier.
Online retailer AO World posted a bump in sales, but warned demand had fallen heading into the summer.
AO World delivered UK revenue growth of 8.0% in the period from April 1 to June 30. In Europe, sales were up 46.2% in constant currencies. Shares edged down 0.4p to 144p.
Moneysupermarket.com shares closed 19.1p higher at 328.4p as it unveiled plans for a mortgage comparison site, in a joint venture with HD Decisions.
Sky’s shares were down 22.5p to 1,508.5p by the close when it emerged Comcast was scrapping its plans to bid for Rupert Murdoch’s 21st Century Fox assets, and would focus solely on a £26 billion takeover of UK broadcaster Sky.
Goals Soccer Centres shares slumped after the firm said its sales were knocked by the Beast from the East.
The firm, which runs football centres in the UK and the US, said its results would be “materially below” analysts’ expectations or the full year, knocking its shares by 21% or 18.5p to 68p.
The biggest risers on the FTSE 100 were Unilever up 127.5p to 4,330.5p, Imperial Brands up 53p to 2,905.5p, Coca-Cola HBC up 51p to 2,801p and BP up 7.7p to 569.9p.
The biggest fallers on the FTSE 100 were Anglo America down 69p to 1,622p, Melrose Industries down 7.1p to 218.4p, Ashtead Group down 72p to 2,340p and WPP down 34.5p to 1,141p.