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Has the long-awaited consumer crunch finally arrived?
A 0.2 per cent fall in the UK’s monthly retail sales at the start of the year has sent the pound tumbling this morning, amid concern that rising inflation may finally be putting a brake on the consumer-driven growth. The monthly figure was expected to rise 1 per cent.
Sterling fell to £1.2418 against the dollar after the news, a tumble from £1.2488 and is down 0.6 per cent on the day.
Commenting on the 0.4 per cent monthly decline – the second consecutive month of falls – the Office for National Statistics said there were signs of the first underlying fall in retail sales growth since 2013.
Sterling’s dip could reflect an expectation of a more dovish Bank of England which has said it remains broadly neutral on whether its next move will be to raise or lower interest rates from their current record low.