The pound rose against the dollar (GBPUSD=X) on Tuesday, up 0.3% to $1.3208, supported by weakness in the greenback.
The US dollar index, (DX-Y.NYB), which measures the greenback against a basket of six currencies, dipped 0.3% to 101.53 at the time of writing, as optimism over the US-China tariff deal appeared to wane slightly.
Neil Wilson, UK investor strategist at Saxo Bank, said that “UK employment data shows cracks emerging, which supports a more dovish bias from the Bank of England (BoE)”.
He added that the “BoE should not be hanging about and get in there with cuts, the inflation is not the problem now”.
Meanwhile, data from the British Retail Consortium, also published on Tuesday, showed a 7% increase year-on-year in UK retail sales. That was up from a 4% decline recorded in April 2024 and was above average three-month growth of 2.9% and a 12-month average of 1.4%.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “This was boosted both by the favourable timing of Easter and the sunniest April on record. A more meaningful comparison looked at March and April combined.
“Here the trend still moved in the right direction but to the much smaller tune of 0.2% which is unlikely to offset the impact of higher wages and employers’ National Insurance contributions on profits.”