GBP/USD: Sterling Hits Fresh 3-Year High at $1.3480 as UK Retail Sales Surprise to Upside

British retail sales really delivered this time — was it the good weather or was it consumer confidence despite rising inflation?

🎯 Sterling Soars to $1.3480

• The GBPUSD pair advanced to a fresh three-year high of $1.3480 after a much brighter-than-expected retail sales report got traders excited about the UK economy and the sterling.
• Retail sales volumes rose 1.2% for the month — six times the 0.2% gain expected by analysts. That’s not just a beat, it’s a blowout. The March figure was also revised slightly higher, making April’s strength look even more robust in context.

💪 Consumer Comeback… in This Economy?

• So, what’s behind the surge? Sunshine and strong sentiment, apparently. Analysts attributed the spending spree to an unusually warm April, which encouraged shoppers to head back to high streets and garden centers.
• But even more telling: the numbers came despite a cost-of-living squeeze from higher road taxes, rising household bills, and persistent inflation — including the recent April CPI print of 3.5%.
• That’s a sign that UK consumers may be more resilient than feared. Or, at the very least, that warm weather still does its job on British wallets.

💷 Markets Flock to Sterling

• The pound’s reaction was swift. Already riding high on momentum from this week’s inflation surprise, sterling’s latest push higher saw it break through the key $1.3450 level with ease, hitting highs not seen since March 2022.
• The pound-dollar pair is now up nearly 5% since the start of April — a run powered by receding Fed rate-cut hopes, softer US data, and an increasingly hawkish tilt from the Bank of England.
• The question now is whether this rally has legs. With no major UK economic releases due next week, sterling may need help from the broader risk backdrop or fresh dollar weakness to keep climbing. Still, Friday’s data has traders recalibrating their outlook — and that alone could keep the momentum alive.