UK retail data boosts pound

Published: May 22nd, 2014

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The Bank of England may be forced to raise interest rates sooner than it intended due to the sharp increase in UK retail sales, which boosted the currency.

The pound was boosted by 0.5% to the US dollar, reaching $1.6922. This is the strongest it has been for 11 days. It hit a 16-month high against the euro at £0.8103.

UK retail sales increased 1.3% on the previous month. This came minutes after the Bank of England was considering a slow increase in interest rates, The Wall Street Journal says.

Midmorning saw very little change in European stock markets. Major indexes saw an upward trend after showing early weakness which indicated a downward Wall Street session.

After declines on Tuesday, US stocks opened slightly higher.

The European bond markets showed early recovery after pressure which saw Spanish and Italian yields climbing to a six-week high. The region’s debt issuance saw a reversal during the last few days after a good start to the year.

The Royal Bank of Scotland says not much has changed, but domestic and international investors are not in support of the market due to impending European elections.

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