Pound tumbles on weak retail sales

HOLIDAYMAKERS could be in for a nasty surprise when they pick up their travel money after the pound tumbled to a 10-month low against the dollar yesterday.

One pound will now buy just $1.30, compared to $1.43 back in April.

Sterling is also down against the euro at just under €1.12.

Markets sent the pound down in response to weak retail sales in June, which could make the Bank of England think twice about raising interest rates.

Officials are expected to raise the base rate from 0.5pc to 0.75pc in next month’s policy meeting.

Sales fell by 0.5pc month on month. Food and drink spending continued May’s strong showing with sales volumes up 0.1pc on the month and 3.8pc on the year, the Office for National Statistics said. But a month-onmonth drop of 0.8pc in clothes sales and 0.5pc in household goods dragged down overall retail sales.

It took the edge off annual growth too, which slowed from 4.1pc in May to 2.9pc in June, though that remains high by standards of the past year.

Over the second quarter as a whole, retail sales climbed at a rate of 2.1pc, however – representing their biggest growth spurt since 2004.