LONDON, Jan 19 (Reuters) - Sterling seesawed on Friday after data showed British shop sales slid by much more than expected in December, capping off the weakest year for retail since 2013 as consumers squeezed by high inflation continued to keep a tight grip on spending.
The pound initially fell on the data, before reversing losses to briefly trade at its highest level against the dollar since Britain’s June 2016 vote to leave the European Union on Friday at $1.4943.
But it then slipped again to trade at $1.3916 by 0956 GMT, still up 0.2 percent on the day but down from $1.3935 before the retail sales data.
Retail sales volumes dropped 1.5 percent from November, the Office for National Statistics said, well below economists’ forecasts in a Reuters poll for a monthly dip of 0.6 percent and more than reversing a 1.0 percent rise in November.
Britain’s exporter-heavy FTSE 100 index was nudged to a session high by sterling’s dip as weak retail sales for December added to evidence of a slower year for consumers. The index was little changed overall and was last trading back at its levels before the data.
British government bond futures briefly extended gains by more than 10 ticks to peak at 123.78, 16 ticks up on the day, before retreating to be broadly flat on the day. (Reporting by Jemima Kelly, David Milliken and Helen Reid; Editing by Abhinav Ramnarayan)