MARKET REPORT

THE pound took a hit yesterday after fresh data showed a dismal drop in December retail sales.

Sterling was down around 0.3% against the US dollar at 1.385, having climbed as high as 1.394 in morning trading ahead of the release.

It had been gaining ground on a weak dollar as US politicians continue to grapple over a stopgap bill that would avert a government shutdown, but was knocked after the Office for National Statistics said UK retail sales tumbled 1.5% month-on-month, marking the worst December performance since 2010.

Lukman Otunuga, a research analyst at FXTM, said an “unsavoury combination” of rising inflation and tepid wage growth had “sapped” consumer spending power.

Versus the euro, the pound was down 0.2% at 1.132.

The weaker pound buoyed the FTSE 100, which ended the day up nearly 0.4% or 29.83 points at 7,730.79, as international firms on the blue chip index tend to benefit when foreign currencies are stronger.

Across Europe, the French Cac 40 and German Dax closed higher, up 0.58% and 1.15% respectively.

Brent crude prices fell more than 0.7% to around 68.57 US dollars per barrel as investors were spooked by warnings from the International Energy Agency, which said US oil production could hit record highs this year.

The biggest risers on the FTSE 100 were easyJet up 71.5p at 1,584.5p, Intercontinental Hotels Group up 124p at 4,928p, NMC Health up 82p at 3,280p, and Rentokil Initial up 7.3p at 316.1p. The biggest fallers were Kingfisher down 7.9p at 336.1p, Next down 82p at 4,898p, Centrica down 1.95p at 139.05p, and BP down 6.6p at 509.9p.