Key Moments
- EUR/GBP traded around 0.8650 for a fourth straight day, tracking a weekly decline of 0.25%
- UK Retail Sales fell 0.4% month-on-month in February, a smaller drop than the -0.8% market consensus
- Spain’s CPI rose to 3.3% year-on-year in March, its highest level in 14 months
EUR/GBP Steady as Markets Look Past UK Consumption Data
The Euro (EUR) was little changed against the British Pound (GBP) on Friday, with EUR/GBP moving sideways in a tight band around 0.8650. The pair has hovered near this level for the fourth session in a row and is currently set for a weekly loss of 0.25%.
Stronger-than-expected UK Retail Sales figures earlier in the day did not provide meaningful support to the Pound, leaving the cross essentially flat. Market participants appeared largely indifferent to the latest UK consumption numbers, given that the data relate to February and precede the onset of the war in Iran.
UK Retail Sales: First Monthly Decline in Three Months
Figures from the Office for National Statistics released on Friday showed that overall UK retail consumption declined in February for the first time in three months. Headline Retail Sales fell 0.4% month-on-month following a 2% increase in January, performing better than the projected 0.8% contraction.
Stripping out automotive fuel, Retail Sales ex-Fuel also dropped 0.4% on the month, after a 2.2% rise in January. This too was stronger than the -0.8% market consensus. On a year-on-year basis, headline Retail Sales growth slowed to 2.5%, down from an upwardly revised 4.8% in the prior month, while Core Retail Sales eased to 3.4% from 5.9% in January.
These February numbers have generated only a muted market reaction, as they do not capture the subsequent deterioration in consumer sentiment and the jump in prices associated with higher Oil prices following the start of the Iran conflict. Data for March, which is expected to reflect these developments, is likely to draw greater attention from investors.
Rising Spanish Inflation Adds Pressure on the Euro
While the Pound saw limited benefit from domestic data, the Euro remained under pressure, with higher Oil prices weighing on the Eurozone outlook. In Spain, the Consumer Price Index (CPI) accelerated to 3.3% year-on-year in March, marking its highest reading in 14 months.
This pickup in inflation is adding to expectations that the European Central Bank (ECB) could face increased pressure to raise interest rates in April, further shaping the policy backdrop for the single currency.
UK Retail Indicators at a Glance
| Indicator | Periodicity | Last Release | Actual | Consensus | Previous | Source |
|---|---|---|---|---|---|---|
| Retail Sales (MoM) | Monthly | Fri Mar 27, 2026 07:00 | -0.4% | -0.8% | 1.8% | Office for National Statistics |
| Retail Sales ex-Fuel (MoM) | Monthly | Fri Mar 27, 2026 07:00 | -0.4% | -0.8% | 2% | Office for National Statistics |
About the UK Retail Sales Indicators
Retail Sales data, released monthly by the Office for National Statistics, measure the volume of goods sold by retailers in Great Britain directly to end customers. Monthly percentage changes compare sales volumes in the reference month with those of the previous month and are widely used as a gauge of consumer spending conditions. Generally, stronger readings are interpreted as supportive for the Pound Sterling (GBP), while weaker data are viewed as negative.
The Retail Sales ex-Fuel series follows the same methodology but excludes automotive fuel, providing an additional perspective on underlying consumption trends. As with the headline figure, higher-than-expected readings are typically regarded as bullish for GBP, while softer outcomes tend to be bearish.
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