LONDON, Nov 19, Reuters - Sterling was up against the euro on Friday and was poised for its best week against the euro since Britain's first lock down in March 2020, after retail sales data fuelled bets that the Bank of England will raise interest rates in December.
The pound rose by 0.2% to 84.10 pence against the euro at 0940 GMT after official data showed British retail sales rose by 0.8% last month, a bigger rise than expected.
The BoE is ready to raise interest rates after Governor Andrew Bailey surprised the market by keeping them on hold at its November policy meeting, according to the economic data this week, including UK inflation and job numbers.
The pound climbed versus the euro to pre-pandemic levels this week and touched an 11 month high against the dollar. It was a 0.5% drop at $1.3436, as the dollar strengthened on Friday.
October retail sales are the latest piece of evidence to support a BoE rate hike, ING told clients, adding that the focus will now be on the speech by BoE chief economist Huw Pill later in the day.
He was one of the first to support tighter discussions advanced by Governor Bailey, and he'll have more ammunition now, ING said.
The BoE is expected to become the first central bank to raise rates since the start of the epidemic to try to contain inflation that hit a 10 year high as household energy bills go up.
Britain's job market withstood the end of the government's furlough scheme, as a result of some of the BoE's concerns about tighter monetary policy.
Concerns over Britain and the EU's trade disputes could cause a disruption to the British economy, which is already lagging other rich nations, which is why Capping sterling's rise.
Britain left the EU last year but put off some border checks between its province of Northern Ireland and EU member Ireland that the bloc says is required under their divorce deal.
The spending watchdog said that Britain had been unprepared for a crisis like COVID 19 and was distracted by Brexit.