The British pound continued its slide against the U.S. dollar on Friday, heading toward $1.33 and marking its sixth consecutive daily decline. Traders are favoring the greenback amid expectations that the Federal Reserve will approach interest rate cuts cautiously, while doubts persist about how much the Bank of England can ease policy without reigniting inflation.

Retail Sales Beat Expectations

UK retail sales rose 0.5% in September, defying economists’ expectations of a 0.2% decline and marking the fourth straight month of growth. August figures were also revised up slightly to 0.6% from 0.5%, indicating steady consumer momentum despite persistent inflation pressures.

Inflation Concerns Keep Pound Under Pressure

Consumer prices in the UK climbed 3.8% in September, nearly double the Bank of England’s 2% target. The combination of slowing wage growth and stubborn price increases continues to squeeze household finances.

Analysts note that while strong retail data shows that consumers are still spending, it may only delay potential rate cuts and is unlikely to provide significant support for the pound in the near term.