UK Retail Sales Rise Amid BoE Rate Cut Bets, GBP Ignores Data on Tariff Jitters

Adding to the dovish narrative are concerns over escalating tariffs and the threat of a broader global trade war, fueling fears of a UK recession.

James Smith of the Resolution Foundation commented:

“Tariffs will hurt the economy and destroy good jobs outside London and SE, so expect policy. Big risks is this turns into a global recession.”

Bank of England Governor Andrew Bailey discussed US tariffs on Thursday, April 24, stating:

“It’s not just the relationship between the US and the UK, it’s the relationship between the US, the UK and the rest of the world that matters so because the UK is such an open economy. We have to take very seriously the risk to growth. I’ve said a number of times, fragmenting the world economy will be bad for growth.”

GBP/USD Reacts to the Retail Sales Report

The pound showed a muted response to the retail sales data. Ahead of the UK retail sales data release, the GBP/USD briefly climbed to a pre-report high of $1.33407 before dropping to a low of $1.32731.

Following the UK retail sales data release, the GBP/USD rose to a high of $1.32828 before sliding to a low of $1.32740.

On Friday, April 25, the GBP/USD was down 0.45% to $1.32781, reflecting the market’s sensitivity to inflation, labor market trends, tariffs, and their implications for the BoE.