Pound Holds Steady at $1.2750 Despite Steep UK Retail Sales Drop

Sterling remained steady around $1.2750 on 22 May despite April retail sales plunging 1.4% month-on-month, the steepest fall since May 2024. The weak print followed worse-than-expected public borrowing of £24.3 billion, which exceeded the OBR forecast by £3.4 billion and featured record April debt interest of £10.3 billion. Markets have priced in greater odds of Bank of England rate cuts later this year, pushing gilt yields lower, yet immediate GBPUSD reaction stayed muted as the data largely confirmed already-discounted consumer weakness.