Pressure on sterling eases as sales slow

THE UPWARD pressure on the pound ebbed slightly yesterday as a survey of retailers suggested the pace of spending was slowing. Sterling ended at just over DM3.08, down nearly two pfennigs from Wednesday's close, while the FTSE 100 index gained another 35 points to reach 6,052.8.

Businesses were hoping for more relief from the threat of a rise in interest rates next week from figures on the service sector, due today, and on manufacturing output on Monday.

The Confederation of British Industry reported a marked slowdown in its survey for March in the annual growth of retail sales volumes. "A further interest rate increase would be inappropriate," said Alastair Eperon of the CBI's distributive trades panel.

The lateness of Easter this year explains part of the year-on-year weakness, with sales of chocolate eggs and DIY goods well below last March's levels. But the underlying trend also pointed to a slowdown in sales growth from its earlier highs.

Eddie George, Governor of the Bank of England, told MPs yesterday the interest rate decision was finely balanced. Growth was slowing, he said, replying to questions from the Treasury committee. He added: "What the debate is about is the timing and the pace. It has to happen fairly soon and it has to go a long way."

Gordon Brown, the Chancellor, repeated his determination to avoid the short term stop-go policies of the past. "I'm aware of the problems that exporters face. But we've got to take a long-term view," he said.

"Industry understands - its workers and managers - that they must be careful about their wage bargaining in order to ensure greater competitiveness, particularly in relation to exports," he added, speaking at a lunch in the House of Commons.

Both the Chancellor and the Governor also claimed the pressure on sterling would ease as the financial markets came to recognise that the Euro would be a strong currency.

Yesterday's CBI survey showed 44 per cent of retailers reporting higher sales in March than a year earlier, while 30 per cent said they were down. The positive balance of 14 per cent was weaker than expected, and well down from February's 33 per cent.

Retailers expected orders to pick up slightly in April, but they were less optimistic than any time since January 1996. The only strong performers in March were furniture and carpet stores and booksellers and stationers.

A separate survey yesterday showed the construction industry was still booming last month. The Chartered Institute of Purchasing and Supply survey of 130 members showed a pick-up in activity, employment and costs with clear signs of bottlenecks in longer delivery times and skill shortages.

Start your day with The Independent, sign up for daily news emails
Property
pets
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThe ZX Spectrum is going back on sale - with all your favourite retro games
Sport
football
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk