April 24, 2020 / 8:06 AM / a month ago

Sterling slips after record UK retail sales drop

* Graphic: World FX rates in 2020 tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv

By Ritvik Carvalho

LONDON, April 24 (Reuters) - Sterling slipped against the dollar on Friday after data showed the biggest drop in British retail sales on record, adding to fears about the economic impact of the coronavirus pandemic.

Official figures showed sales volumes fell by 5.1% in March, reflecting the hit from the coronavirus shutdown which closed many businesses in the second half of the month.

The fall, which was bigger than a median forecast for a drop of 4.0% in a Reuters poll of economists, came despite a surge in shopping for food.

A separate survey by polling firm GfK showed British consumer confidence held at its lowest since 2009 this month after tumbling in late March.

By 0754 GMT, sterling was down 0.15% against the dollar at $1.2322

Weak flash purchasing managers indexes on Thursday did not put a dent in the pound.

As Britain’s lockdown measures limit people’s ability to live, work and spend money as normal, economists expect the country to see its worst economic contraction in more than 300 years.

A Reuters poll of nearly 80 economists published on Thursday estimated that Britain’s gross domestic product would see its biggest quarterly drop since World War Two this quarter.

“Sterling-dollar can still go lower,” said Francesco Pesole, currency strategist at ING, adding that pressure was piling up against the pound given the economic impact of the pandemic.

“COVID-19 as a crisis has proved to be longer than expected, and investors are looking for some indication of what the UK government’s exit plan will look like.”

Against a broadly weaker euro, sterling gained 0.1% to trade at 87.16 pence. The euro weakened as specifics on the size and structure of the funding for an emergency fund for the euro zone remained scant.

Reporting by Ritvik Carvalho; Editing by Pravin Char

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