Retail sales in the UK rose 0.4% on the month of July, the largest rise in 14 months as higher consumer spending boosted the UK economy. The annual gain of 3.3% is the highest since May 2008, providing evidence that the UK could be working its way out of recession.

Sterling exchange rates jumped following the release of the data, though record public borrowing forced the pound to trim these gains. The budget deficit is running at GBP8 billion in July, as higher unemployment, increased government spending and lower tax revenues took their toll on government income. Market reaction to the news was negative and this sent sterling exchange rates lower against its major currency partners.

Sterling exchange rates are currently valued at USD1.6485 and EUR1.1581.

The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.