U.K. retail sales likely to ease

The CBI Distributive Trade Survey reported sales balance of +20 percent, coming in above market expectations, in July. This follows on from official retail sales data that recorded a sharp recovery in spending in the second quarter, with the most rapid growth, of 2.1 percent sequentially in 14 years, after the snow-disrupted first quarter.

The CBI recorded strong sales in sectors such as footwear and recreational goods but weakness in areas like furniture and clothing. While this is further evidence of a rebound in consumer circumstances, the more forward-looking indicators imply that this rate of sales might not be sustained, noted Daiwa Capital Market Research in a report.

As several retailers anticipated sales to drop next month as rise, and a net 8 percent more placed fewer orders with suppliers than they had one year ago, implying the current uncertain backdrop might be giving rise to renewed consumer caution. However, there is nothing sufficient in this survey to deter the BoE from hiking Bank Rate next week.

At 21:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral at 11.5221, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -75.2338. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex