Investing.com - The pound edged lower against the U.S. dollar on Thursday, after the release of a weak U.K. retail sales report added to concerns over the outlook for British economic growth, although upbeat public sector borrowing data lent some support.
GBP/USD hit 1.3161 during European morning trade, the session low; the pair subsequently consolidated at 1.3183, shedding 0.16%.
Cable was likely to find support at 1.3061, Wednesday’s low and resistance at 1.3480, the high of July 15.
The U.K. Office for National Statistics said that retail sales dropped 0.9% in June, compared to the prior 0.9% gain. Analysts had expected retail sales to fall 0.6% last month.
Year-on-year, retail sales increased 4.3%, compared to May’s 5.7% gain which was revised from the initial reading of a 6.0% gain. Consensus had forecast a 5.0% rise.
Core retail sales, which exclude automobiles, fell 0.9% on the month, compared to the prior 0.9% increase in May whose figure was revised from an initial 1.0% advance. Analysts had expected core retail sales to drop 0.6% last month.
The weak data added to concerns over the strength of the British economy after the International Monetary Fund on Tuesday cut its U.K. growth forecast to 1.7% from the prior 1.9% for this year and slashing 2017 growth to 1.3% from April’s estimate of 2.2% due to the Brexit.
The IMF also downwardly revised its projection for global economic growth in 2016 to 3.1%, from the prior 3.2%, though expecting a rebound to 3.4% in 2017.
A separate report on Thursday showed that U.K. public sector net borrowing fell to £7.31 billion in June from an upwardly revised total of £9.41 billion the previous month. Analysts had expected public sector net borrowing to hit £9.20 billion last month.
Sterling was also lower against the euro, with EUR/GBP gaining 0.34% to 0.8366.