Sterling Slides Ahead of U.S. Jobs Report

The British pound experienced a minor decline against the dollar and the euro as investors secured profits ahead of a crucial U.S. jobs report. Despite strong UK consumer spending data, Sterling is down from recent highs. Barclays and British Retail Consortium surveys indicate positive but slowing economic growth.

On Tuesday, the British pound edged lower against both the dollar and the euro, as investors locked in profits following sterling's largest monthly rally in ten months. This comes just before a significant U.S. jobs report is set to be released later this week.

Recent data revealed that August's summery weather boosted UK consumer spending on food and drink, though it provided little support to the pound. In early trade, Sterling was down 0.2% against the dollar at $1.31165, about 1.2% below last week's two-year high of $1.3269. The euro gained 0.1% against the pound, marking its third consecutive day of increase.

According to Barclays, consumer spending on its credit and debit cards rose by 1.0% year-on-year in August, reversing a two-month decline. A survey from the British Retail Consortium mirrored this trend, showing a 1.0% annual increase in shop spending, the most robust growth since March. Economists believe that the UK economy will grow steadily in the second half of the year, although at a slower rate compared to earlier periods. Strategists at Lloyds noted that the recent growth in retail values might indicate an improvement in underlying volumes rather than just higher prices.

(With inputs from agencies.)