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The poor data just keeps on coming.
The British Pound dropped in the minutes after the ONS revealed UK retail sales grew by less than expected in June.
Sales rose to 0.9% month-on-month in June said the ONS, from -2.8% in May, but the figure still disappointed against an expectation for 1.2%.
The ONS said the gains were mainly driven by food store sales which rose following a fall in May 2025, with retailers reporting the warm weather had a positive effect. Vehicle fuel sales also saw noticeable growth.
For foreign exchange markets, it is how data meets expectations that is important, and the softer Pound in the minutes following the release is therefore understandable: the Pound to Euro exchange rate slipped from 1.1490 to 1.1480, the Pound to Dollar rate slipped from 1.3504 to 1.3480.
"June's retail bounce is more BBQ than boom, driven by burgers, beer and beachwear. It’s a welcome pick-me-up, but with sales still well below March levels and volumes barely rising across the quarter, it feels more like a blip than a bounce-back," says Ranald Mitchell, Director at Charwin Mortgages.
Monthly retail figures can be quite volatile, but Economist Andrew Sentance, a former member of the Bank of England's Monetary Policy Committee, says trend year-on-year retail sales growth is 1.8%. He explains this is "consistent with slow underlying economic growth."
The retail numbers are the latest in a string of disappointing data releases that show the British economy to be struggling to achieve the strong growth Chancellor Rachel Reeves requires to fund rising government expenditures.
"The UK data dump over the past couple of days shows an economy running at half pace at the start of summer," says Kallum Pickering, Chief Economist at Peel Hunt.
"While headline sales figures for June suggest modest momentum on the surface, much of the uplift was seasonal and driven by heavy promotional activity around events, sport and warmer weather. Beyond that, demand remains selective and so-so," says Nicholas Found, Head of Commercial Insights at Retail Economics.
Incoming economic figures raise the prospect of continued interest rate cuts at the Bank of England in 2025 and 2026, at a time when the European Central Bank and U.S. Federal Reserve will be more inclined to hold their own rates.
Above: GBP/EUR falls in the wake of the retail sales release.
The prospect of deteriorating UK finances and interest rate divergence is pressuring the Pound which is trending lower against the Euro and struggling to rediscover the momentum it enjoyed against the Dollar in the first half of the year.
According to Scott Gallacher, Director at Rowley Turton, the rise in retail sales, especially food and drink, says less about renewed confidence and more about people drowning their sorrows or comfort eating as economic worries mount.
"Rather than celebrating good times, shoppers might simply be seeking small comforts in the face of rising unemployment, sticky inflation, and falling house prices," says Gallacher.
On Thursday the S&P Global PMI report showed private sector activity expanded in July, however, there was a noticeable decline in employment intentions.
It suggests that a trend of monthly declines in payrolled employment is likely to stay, with commentators and businesses overwhelmingly blaming the payroll tax increases introduced by Reeves in April.
"Economically, there are still dark clouds overhead," says Gallacher.