The pound fell yesterday on the back of a fall in retail sales.

Sterling started the day down at £1.88450, €1.46850 and 218.52500 yen.

Data from the Office for National Statistics (ONS) revealed overall sales growth fell in July although the body stated sales "remained robust when compared with the rates of growth seen generally over the last two years".

Retail sales fell 0.3 per cent - largely off the back of falls from electrical retailers - after their World Cup boost to trade faded.

The ONS figures brought the pound down as they furthered speculation that a second interest rate rise this year would not be necessary.

Howard Archer, chief UK and European economist at Global Insight, said: "The unexpected fall in July retail sales revives doubts about the strength of consumer spending.

"The strength of consumer spending over the coming months will be a key determinant of if, and when, interest rates rise again."

He added that the minutes of the August meeting of the Bank of England's monetary policy committee noted that the interest rate decision was in part based in a prediction for steady growth in consumer spending.

"Consequently, much attention will be focused on how well retail sales fare following the
interest rate hike," the economist added.

Meanwhile the euro wobbled slightly after inflation figures were released. Eurozone inflation was down 0.1 per cent to 2.4 per cent - although analysts predict that an interest rate rise may still be on the cards.