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According to Reuters, the euro gained 0.2 per cent on the pound earlier today (April 11th 2011) to hit 88.60p, with analysts pointing to reduced expectations of a May Bank of England rate rise as a major factor in sterling's struggle.
"The underlying story is that people are losing confidence in the May rate hike in the UK," Lloyds TSB currency strategist Adrian Schmidt explained. "The [inflation] data is going to be the key issue."
His comments came after the British Retail Consortium warned of continued weakness in consumer spending, with confidence remaining low and house prices estimated to have fallen further last month.
Figures published this morning by the Centre for Economics and Business Research indicated that UK household disposable income had fallen to its lowest level since 1921, with food, energy and clothing prices hurting spending power.
Posted by Chris Weaver
