Sterling stumbles amid poor retail sales
Sterling recorded a ten-week high against the euro, but fell further against the dollar overnight as emerging news from the British high street proved disappointing.
The dollar was worth 1.2221 to the pound this morning, while the euro stood at 1.4797.
The pound's rise against the euro marked a high in recent weeks, but sterling dipped after retail figures indicated weaker than expected consumer health.
According to data from the Office for National Statistics the expected 0.1 per cent increase in high street sales failed to materialise, as spending remained static.
Analysts are now waiting to see if spending is likely to retract further as Britons tighten their belts.
Calyon's Daragh Maher told Forbes he thought that further negative details this week on consumer spending could begin to put pressure on the pound and also on the Monetary Policy Committee to consider a rate cut.
"After a run of generally neutral and sometimes hawkish data, news that the UK consumer is still suffering keeps alive the possibility of a rate cut during the fourth quarter of 2004, most likely in November," he commented.